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2018 Mortgage Stress Test

In 2018 the new requirement is to “stress test” borrowers. Borrowers have to be tested at 200 base points above the current rates.

We may see an increase in 2nd mortgages if borrowers can not qualify for the first mortgage.

ANALYSIS: How to buy a home the right way, according to the CMHC
On a $500,000 home with a $50,000 down payment, the CMHC says a borrower would be charged an extra $13,950 to insure the $450,000 mortgage.

The vast majority of first-time borrowers have to purchase mortgage insurance, and they have been obligated to undergo a stress test of their finances since last year.

Anyone who puts down more than 20 per cent of the value of a home doesn’t have to pay such insurance, and is known as an “uninsured” borrower — the people affected by the new rules starting January 1, 2018.

Notably, the new stress test rules won’t apply to mortgage renewals as long as they are with the borrower’s existing lender.