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Thread: Proposed - More Stringent Mortgage Stress Test After June 1

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    Default Proposed - More Stringent Mortgage Stress Test After June 1

    The Office of the Superintendent of Financial Institutions (OSFI) unveiled its proposed changes on Thursday, which would require borrowers applying for uninsured mortgages—typically those with more than a 20% down payment—to qualify at their mortgage contract rate plus two percentage points or 5.25%, whichever is higher.

    (Read More @ Bloomberg) - Housing-Bubble Fear Spurs Canada to Weigh Tighter Mortgage Rules

    The stress test currently has a minimum qualifying rate of 4.79%, nearly 50 basis points lower.

    The impact to the changes will reduce purchase power for uninsured borrowers by between 4% and 4.5%. “The maximum amount that can be borrowed under the new rule would decrease by 4.5% (from $442K to $422K for a median-income household)".

    There’s no word yet if changes to the insured mortgage stress test (less than 20% down payment) will be forthcoming as well. But the Minister of Finance, who oversees the stress test says he will continue to monitor housing market conditions across the country.

    The public is invited to provide feedback to OSFI via [email protected], which will be accepted up to May 7, 2021. OSFI will then communicate some of that feedback and any final amendments to the qualifying rate by May 24, 2021, prior to the new stress test taking effect on June 1, 2021.

    If you have questions that pertain to your situation, feel free to PM, email or call.
    Thanks,
    Tim Lacroix | 403-648-1541
    Mortgage. Made Easy Experts
    Kardia Mortgage Inc
    www.TimLacroix.com

    If you have any questions please feel free to PM me or email [email protected]

    Click here to View current Mortgage Rates

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    The housing bubble isnt caused by regular people buying houses though right? its caused by rich people buying houses or foreign buyers all of which prob breeze through this stress test.

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    Quote Originally Posted by nzwasp View Post
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    The housing bubble isnt caused by regular people buying houses though right? its caused by rich people buying houses or foreign buyers all of which prob breeze through this stress test.
    Yeah this won’t do anything, just like when B20 was first introduced...

    On the alt side I’m seeing a lot of existing landlords pulling out a ton of recently realized equity to double down on more properties... 85%+ of market rents going towards qualifying income, basically self feeding with Ontario prices jumping 60% in many markets

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    Quote Originally Posted by ercchry View Post
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    On the alt side I’m seeing a lot of existing landlords pulling out a ton of recently realized equity to double down on more properties... 85%+ of market rents going towards qualifying income, basically self feeding with Ontario prices jumping 60% in many markets
    Stuff like that is so bunk. This idea that I could buy a property, not improve it at all, re-appraise some short time later and immediately leverage my cash out to go and do it again on another property....

    Imma found myself an REIT and call it Archegos

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    Quote Originally Posted by nzwasp View Post
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    The housing bubble isnt caused by regular people buying houses though right? its caused by rich people buying houses or foreign buyers all of which prob breeze through this stress test.
    I'm still of the mindset that a large portion of the population that was able to WFH is actually in better financial position because of then pandemic. Keep your same income but forced to not travel, not eat out, not waste as much money and lots of couples could probably save 5% down on a 500k house within the pandemic year. Then 2021 comes along with record low interest rates so they decide to buy and with inventory being down from last year it's a perfect catalyst for a heated market.

    The fact that we're seeing a hot market across all of Canada makes me doubt it's any kind of foreign buyers significantly influencing the market (outside maybe Van/Tor). Who the fuck from China is going to buy a house in Airdrie.
    Nolan

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    Quote Originally Posted by pheoxs View Post
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    I'm still of the mindset that a large portion of the population that was able to WFH is actually in better financial position because of then pandemic. Keep your same income but forced to not travel, not eat out, not waste as much money and lots of couples could probably save 5% down on a 500k house within the pandemic year. Then 2021 comes along with record low interest rates so they decide to buy and with inventory being down from last year it's a perfect catalyst for a heated market.

    The fact that we're seeing a hot market across all of Canada makes me doubt it's any kind of foreign buyers significantly influencing the market (outside maybe Van/Tor). Who the fuck from China is going to buy a house in Airdrie.
    I can’t wfh but I definitely saved a larger chunk last year, on top of monetizing some depreciating assets as well. Work was actually busier than usual for wholesale vehicles other than two weeks of uncertainty early on in Covid. Now I’m planning to put a 50% down payment on my next home and let my gf pay the rear of the mortgage while I save even more money monthly. I’d say the year was a nice reset for my finances that probably set me up to be even more secure in the future.

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    Am I reading this wrong, or are they making it worse for people who pay 20% or more?
    Why does the system seem to want people to borrow the most money... oh wait...

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    Housing is a human right. I'm sure unread that somewhere
    Quote Originally Posted by Tik-Tok View Post
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    I'd be lying if I said I didn't disagree.
    Quote Originally Posted by suntan View Post
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    His name isn't NICEramos.

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    New test:

    Now must prove you are alive. They won't just take you at your word.

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    Quote Originally Posted by suntan View Post
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    New test:

    Now must prove you are alive. They won't just take you at your word.
    What if we believe in the simulation theory, and dont believe anyone is truly alive.
    Originally posted by beemerm3
    so if we only seen 5 % of the oceans why not drain them or somethin lol or can u even transfer water from one ocean to another??? think of all the stuff u'd find treasures n eerything.

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    Quote Originally Posted by Kobe View Post
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    What if we believe in the simulation theory, and dont believe anyone is truly alive.
    As long as you identify as alive, you're good.

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    Quote Originally Posted by Tik-Tok View Post
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    I'd be lying if I said I didn't disagree.
    Quote Originally Posted by suntan View Post
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    His name isn't NICEramos.

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    Yeah am i missing something with this new rule? sounds like its only going to affect the people with 20% down who realistically are not going to be the biggest problem if rates sky rocket
    Quote Originally Posted by Mitsu3000gt View Post
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    and I did not have the only say in the matter (most people just want it done ASAP and don't care about quality).
    Quote Originally Posted by Mitsu3000gt View Post
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    If anything we made a better decision because we had a consensus and were all on the same page.

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    Quote Originally Posted by Rocket1k78 View Post
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    Yeah am i missing something with this new rule? sounds like its only going to affect the people with 20% down who realistically are not going to be the biggest problem if rates sky rocket
    It’s poorly written... B20 was always for all loans from institutions regulated by OSFI

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    ahh so this new test is for anyone looking to buy whether or not you got 20%
    Quote Originally Posted by Mitsu3000gt View Post
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    and I did not have the only say in the matter (most people just want it done ASAP and don't care about quality).
    Quote Originally Posted by Mitsu3000gt View Post
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    If anything we made a better decision because we had a consensus and were all on the same page.

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    Quote Originally Posted by Rocket1k78 View Post
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    ahh so this new test is for anyone looking to buy whether or not you got 20%
    The whole point is reduce affordability and get the borderline flippers to stay out.

    End of the day, if you qualify before and not after, sound like all you need is put another $20K down on average and you are back in play.

    It'll help but I don't think that will stop the bubble going.


    Don't know if Chinese money is at play but Chinese home owners are used to 4.9% variable mortgage with 30% down on 1st home and 70% down 2nd. Our RE market is down right bargain basement cheap and mortgage rules are lax. Not sure if there are more capital flight if US uses nuclear option on unpegging HKD.
    Last edited by Xtrema; 04-12-2021 at 11:54 AM.

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    ^^^Thanks for the explanation. Getting ready to list my place and i got a couple things to take care of in it so just seeing the urgency.
    Quote Originally Posted by Mitsu3000gt View Post
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    and I did not have the only say in the matter (most people just want it done ASAP and don't care about quality).
    Quote Originally Posted by Mitsu3000gt View Post
    This quote is hidden because you are ignoring this member. Show Quote
    If anything we made a better decision because we had a consensus and were all on the same page.

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