The Impact of Mortgage Stress Tests on Young Buyers

Recent data indicates that the youngest buyers in the country are affected most by the government’s mortgage stress test. According to recent industry insight reports from TransUnion, mortgage originations were down nearly 8.9% in Q2. As compared to last year, originations from buyers between ages 18 and 25 are down 13.4%. This is the fourth consecutive quarter that balances and mortgage originations were down on an annualized basis.

Bank of Canada lowers rate to 5.19% used in mortgage stress test, making it easier to qualify!

The Bank of Canada has lowered the rate used by mortgage stress tests which is used to determine whether would-be homeowners can qualify. This marks the first drop in three years. The central bank’s five-year benchmark qualifying rate is now 5.19 per cent, down from 5.34 per cent. This is the first decrease in the five – year fixed mortgage rates since September 2016 when it dropped to 4.64% from 4.74% and increased steadily since.

Things First Time Home Buyers worry about when applying for a Mortgage.

Applying for a mortgage for your home can be stressful. Buying a new home is one of the largest purchases you will make especially if you’re a first-time home buyer. We have made a list of the things that first – time home buyers worry about when getting a mortgage.

Latest Impacts of the Stress Test

Here’s a quick summary of the latest findings which look at the impact of the stress test on home sales and the price of homes over the past year as well as the current state of awareness among customers.

Study finds that Stress test responsible for drop of as much as $15-billion in new mortgages.

The federal government’s new mortgage stress test was responsible for a drop of approximately $15-billion in residential mortgage borrowing last year according to a report released recently. The rule change in 2018 was the biggest factor in the 8% drop in new mortgage originations in Canada.

Nolan SmithApril 23, 2019Mortgage Stress Tests, Mortgage Broker, Nanaimo

Fall in Home Sales from January 2019

The Canadian Real Estate Association (CREA) reported this month that national home sales fell by nearly 9% from January to February. 75% of local markets, including major cities, recorded fewer transactions. This is not the first time a steep month on month decline has been reported. In January 2018, home sales dropped when the mortgage stress test came into effect.