Effective June 1 all borrowers will have to qualify for their mortgages based on a rate of 5.25% which is up from the current qualifying rate of 4.79%.
This change was rolled out for implementation June 1/2021. We are still waiting for clarification with respect to how lenders will be handling files already in progress and a flurry of activity before the June 1 implementation date is anticipated.
One of the main reasons for the rule changes is to prepare for an increase in mortgage rates to the pre-pandemic range given the extraordinarily low interest rates. The regulator is also expressing concern about current real estate market conditions.
An annual income of 100,000.00 with a purchase of 475,000.00 with a 5% down payment will be reduced to a purchase price of 450,000.00. Please feel free to call and discuss your specific situation and how the new rules will affect your purchasing power.