This week, the Federal Government tweaked the “stress test” — the much-debated B-20 — that was designed to reduce the risk of debt for people seeking mortgages by improving the quality of loans.
A change is coming.
Starting in April, the Federal Government will change the stress test qualifying rate.
Current rate: the greater of the borrower’s contract rate, or the Bank of Canada five-year benchmark posted mortgage rate, plus two percentage points.
Coming rate: the greater of the borrower’s contract rate, or the weekly median five-year fixed insured mortgage rate from mortgage insurance applications, plus two percentage points.
The change is underlined.
The government says this “will allow the rate to be more representative of the mortgage rates offered by lenders and more responsive to market conditions.”
Already, there is debate about the impact of this change.
What do you think?