The Bank of Canada is set to reduce its qualifying rate ten basis points, from 5.04 to 4.94 percent, sources tell Mortgage Broker News.
Bank of Canada to drop qualifying rate
Centum Intouch Mortgage Solutions broker Anthony Venuto sees the lower qualifying rate as being primarily helpful to borrowers are on the verge of receiving funding who still need a slight boost.
The move would make it harder for riskier borrowers, who offer down payments of less than 20 per cent, to access CMHC’s default mortgage insurance.
Canada’s mortgage insurer tightens rules as it forecasts home-price drop of up to 18%
'COVID-19 has exposed long-standing vulnerabilities in our financial markets, and we must act now to protect the economic futures of Canadians'
Both RBC and BMO cut a number of their posted mortgage rates this week, which should cause the mortgage stress test to fall from 5.04% to 4.99%, according to RateSpy.com.
Latest in Mortgage News: Stress Test Rate to Drop
“It’ll mark the first time since January 2018 (when OSFI’s stress test began) that this benchmark rate has been under 5%,” the site noted. “And, if one more bank matches BMO’s and RBC’s 4.94%, it could drop another 5 basis points.”
These are good news for buyers.
Home prices drop again in Edmonton, benchmark lowest in six years: report
With the largest price drop in Canada, Edmonton seems like a good bet to buy a new home.
New homes in Edmonton see largest price drop in Canada
New data released by the Canada Mortgage and Housing Corporation shows that homes in Alberta’s capital city recorded the largest month-over-month price drop in the country (-0.8 per cent) in July.
