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  Mortgage Rule Changes​​

Recent mortgage rule changes intended to cool very hot real estate markets in Vancouver and Toronto and to be sure Canadians could tolerate interest rate increases have had the negative effect of making mortgaging more difficult and reducing borrowing power. This change was done with many being completely unaware. 

There are a couple changes that are major and very much effect borrowers and ones that borrowers need to be aware of  :

1. - "The STRESS TEST" - When qualifying for a mortgage the normal method to qualify was to use the current  5 year fixed interest rate.  NOW we must use the 5 year rate PLUS 2 full percentage points. This has a dramatic reduction in borroweing power. If a borrower qualified for a mortgage of $150,000 after Jan 1, 2018 that same borrower would only qualify for $123,000.

2- CHMC / GENWORTH no longer will insure refinances. Borrowers can no longer borrow more than 80% of the value of their home. The more serious concern is that many lenders have completely ended refinance mortgages since they can't have the extra security of CMHC others have limited refinances to major cities leaving those in rural areas and mall towns very limited access to refinance options