Wondering if you have what it takes to pass the government’s newly-mandated mortgage stress test? The new mortgage rule, which took effect January 1, requires all mortgage holders to be able to afford the Bank of Canada’s benchmark rate, or two percentage points above their bank’s posted mortgage rate—whichever is higher.
A simple way to calculate your ability to pass the test, according to this article, is to see if you can comfortably afford a monthly mortgage payment that’s equal to $600 for every $100,000 worth of mortgage.
Even if you’re not worried about the stress test, it makes sense to do this quick mathematical calculation—particularly if you have a variable rate mortgage, since rates are expected to increase in the coming years.
If you have questions about the stress test—or anything else mortgage related—please don’t hesitate to reach out.