The following criteria is not relevant to anyone applying for mortgages with less than 20% down, nor to people who are renewing their existing mortgage.
Now, what is being called the “stress test” or Guideline B-20, will require borrowers to qualify for all conventional mortgages (those with more than 20% down) regardless of their downpayment using the highest interest rate + 2% or using the Bank of Canada benchmark rate whichever is higher.
Who will this change affect?
* Current homeowners who have more than 20% equity and want to access the equity by refinancing.
* Those who have more than 20% down, but would like to borrow more than 80% of what they currently qualify for.
There may still be a way for these buyers to borrow so it would be a good idea to talk to your mortgage broker or banker.
These changes took effect January 1, 2018 unless the borrower/buyer has a signed Contract of Purchase and Sale prior to January 1, 2018.