What are the new mortgage rules ?
Basically the new mortgage rules mean that you'll have to pass a test. It's called a stress test and it's simpler than the name might imply.
The new stress test means that you'll have to qualify for your mortage using the minium qualify rate.
The new mortgage rules introduced in 2018 require all canadian home buyers to undergo the mortgage stress test even if you make a down payment of 20% or more.
Previously you would only have to stress test your mortgage if you made a down payment of less than 20%.
So as a Home buyers you will need to qualify not only for the rate negotiated as part of your mortgage contract, but also at the current rate + 2%, or the average bank 5 year posted rate of 4.99% (whichever is higher).
By stressing the mortgage this way, banks will ensure that the borrower will be able to service their loan under pressure, should the interest rates climb higher than the current average.