Broker and Co-Founder, Michael Montgomery had the opportunity to discuss the new mortgage rules implemented across Canada with Global National's Reid Fiest.
As of January 1, 2018, buyers with uninsured (>20% down), as well as insured (<20% down) mortgages, are required to qualify at a higher rate. Buyers have to qualify at The Bank of Canada's Benchmark Rate (currently 4.89%) or 2% higher than their interest rate. This is The Bank of Canada's strategy to avoid buyers being in challenging positions if interest rates were to climb. Furthermore, it targets overheated markets such as Toronto and Vancouver.