OTTAWA RAISES MORTGAGE ''STRESS TEST'' LEVEL TO COOL OFF HOUSING MARKET

Jun 01, 2021

By Bob Komsic

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It’s a bit harder to qualify for a mortgage as of today as the government’s raised the minimum financial bar, or so-called ”stress test,” that anyone applying for a home loan must meet.

It’s up about half-a-percent to 5.25%  or 2% above the borrower’s mortgage rate, whichever is higher.
Introduced to cool down the overheated market of 2017, the ”stress test” does not make the loan any more expensive.
Rather it ensures anyone getting a mortgage will be able to pay it off should rates rise.
The effect on the market is to reduce the number of qualified borrowers in the hopes of cooling down the market.
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