Market Minute - March 2020

The Canadian government recently announced revised mortgage qualification rules that will come into effect on April 6th of this year.

Current rules require would-be buyers to qualify for a mortgage using the Bank of Canada's average five-year-rate. But starting in early April, qualifying using that Bank of Canada rate goes out the window. According to a Department of Finance press release, "the new benchmark rate will be the weekly median 5-year fixed insured mortgage rate from mortgage insurance applications, plus 2 per cent."

Blah, blah, blah

OK. So, what does this actually mean for buyers? This new rule translates to being able to buy roughly 5 per cent more home than you can now.

While not a drastic change, 5 per cent isn't anything to sneeze at. If you're currently pre-approved for $600,000, these new rules could add $30,000 to your budget. Talk to your bank or mortgage broker for more details.