The Bank of Canada has increased the qualifying benchmark rate for mortgages to 5.34% effective immediately. This is not the actual rate borrowers are offered but the rate used to qualify high ratio mortgages and other mortgages when the contract rate plus two per cent is not used.
In most cases, this means, at maximum debt service ratios a 2% smaller mortgage compared to the current 5.14% benchmark. It is important to understand the total mortgage amount offered a borrower can vary from lender to lender. Some lenders use different maximum debt service ratios. Some lenders will apply the old benchmark with existing pre-approvals. Some lenders are using the new benchmark even for existing pre-approvals.
We always work with you and your buyers to obtain the mortgage that suits their needs.
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