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August 15, 2020

Mortgage Stress Test Rate Drops to 4.79%

The Canadian national mortgage benchmark qualifying rate, or stress-test rate, has dropped for the second time in the past three months after 5-year fixed posted rate cuts by Canada’s major banks. The qualifying rate is now 4.79%, down from 4.94%.

The current benchmark rate of 4.79% is just 0.15% above the all-time 2017 low of 4.64%.

4.79% is still over 2.0% above any of the available 5 year rates currently offered by MCAP, First National, RMG Mortgage, Scotia or TD.

This is slightly better for buyers but still significantly impacts borrowing power particularly for BC First Time Home Buyers where home prices continue to rise. We are still awaiting a better system to balance affordability and accessibility.

Originally in April, the Department of Finance indicated homebuyers applying for an insured mortgage would be subject to the stress-tested using a rate 2% above the recent 5-year-fixed insured mortgage rate. This was halted with the COVID-19 impacts being factored in, putting a hold on policy changes for the foreseeable future.

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