New Canada Mortgage Stress Test Explained & How It Affects Canadian Real Estate


Hi Vlad here, today we're going to talk about the new stress test that's coming in January 1st, 2018 what that's going to do or rather the overall gist of the issue is that everybody was applying for a mortgage right now will be tested in their ability to pay is going to test that against a much higher interest rate than before Instead of being tested say against the five year prime rate of roughly 3% people are going to test against a 5% rate and that will dampen or really change the ability of people to pay and a lot of people will fall off the market we've been running with the previous incarnation of us trust us for about a year and now and that was applicable to people with less than 20% down payment I

E Insured mortgages now is going to be applied across the board this will bring the overall number of effective pool of buyers to 20% IE One in five buyers will no longer be able in a position of or that will no longer be in a position to purchase anything and in the real estate market come 2018 The people who are going to be affected dis proportionally is the move up buyers people that already have equity in their houses are planning to sell pull the money out and move into larger property as with everything there is a bit of a silver lining and certainly it is the case here as well we have a lot of uncertainties in the marketplace now specifically the issues with NAFATA nobody knows what that will hold in the coming year we have the stress test that's coming in we have few interest rate hikes and now the Bank of Canada of course is concerned about the overall impact a cumulative impact of all those considerations on to the Canadian economy in the coming years and it's very likely that there is going to be no interest rate hikes in the short to medium term Now if you're in the market and you're thinking about selling or you're thinking about purchasing it's very key that you act right now if you're a buyer utilize your pre-approval to go to a bank and get a preapproval right now before the new regulations kick in again the deadline is January 1st, 2018 and buy the property if you are thinking of because your ability to purchase will be diminished by up to 25% percent in 2018 If you're a seller

again if you have to sell if you don't have to sell sit down tighten your financial belts and perhaps rent the property out but if you have to sell you oughta do this right now the window of opportunity between today and the second part of December in other words it's very very short Act Now there's a spike in bar activity get your property is sold if you have any questions please feel free to reach out to us directly at 416-835-0038 or research our website for more information at wwwMitraMovesYoucom as always we're giving you facts by strategically real estate investment and home ownership and we wish you best of luck today and in the coming year See you next time

Source: Youtube


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