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CTV Mortgage Minute: Mortgage stress tests – June 17, 2021

Clinton meets up with Ana from CTV to talk about mortgage stress tests in this segment of Mortgage Minute.

CTV Mortgage Minute: Mortgage stress tests

Don’t feel like watching the video? Check out the transcript below.

Transcript:

Mortgage Stress Tests—what are they?

Ana Almeida: [00:00:00:11] Hi, I’m Ana Almeida, and I’m here with Clinton Wilkins, and this month on your mortgage, we’re talking about mortgage stress tests. So what is it and how does it impact potential home buyers?

Clinton Wilkins: [00:00:09:23] So the stress test is a higher rate that borrowers have to qualify at.

“it’s going to reduce your borrowing power by five per cent”

Ana Almeida: [00:00:14:11] So how does that impact potential buyers?

Clinton Wilkins: [00:00:17:00] So the stress has changed June 1st and now all borrowers have to qualify on a higher posted rate at 5.25. And if you had a pre-approval before, let’s say for $400,000, it’s going to reduce your borrowing power by five per cent so those borrowers can now afford to make a purchase at $380,000.

What about current home owners?

Ana Almeida: [00:00:34:00] Oh, wow. Okay, and how does this impact, of course, current home owners who are looking to remortgage or refinance?

Clinton Wilkins: [00:00:40:08] So all borrowers now have to qualify at the higher posted rates. So I think now more than ever, it’s important to seek the advice of an unbiased, more professional.

We’ll see you next month!

Ana Almeida: [00:00:47:10] Well, thankfully, we have you for that. And it’s always great to see you. So we’ll see you next time, of course, for another Mortgage Minute.

Announcer: [00:00:54:10] For more information about mortgages, check out TeamClinton.ca.

Looking for more information about changes in the market, or other mortgage application advice? Feel free to contact us!