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Less Stress over the “Stress Test”


Blog by Doriana Zohil-Morton, Broker of Record/Owner | February 19th, 2020


There has been a lot of talk about the “Stress Test” that took effect a few years ago. Currently, the OSFI (Office of the Superintendent of Financial Institutions) requires that all homebuyers requesting a new mortgage – or those switching lenders – prove that they can afford 2% more than the rate their bank is offering, or 2% more than the Bank of Canada 5-year benchmark of 5.19%, whichever is higher.

Starting April 6, 2020, borrowers with insured loans will have to qualify at 2% above the rate their bank is offering, or 2% above a new weekly median 5-year insured mortgage rate that will be based on mortgage insurance applications. Remember, this is for insured mortgages, though there is some expectation that the OSFI will also adopt the same rules regarding uninsured mortgages. Regardless, this does provide just a bit more room in the budget for a home.

Given this news, now is the best time to get into the market, especially considering TREB (Toronto Real Estate Board) is anticipating a 10% value increase in properties this year. Ten percent! Toronto real estate is very strong. If you are looking to buy your first home or invest in Toronto real estate, upgrading your home, or planning a relocation to Toronto, remember…your primary residence is not something you flip. Don’t wait to get into the market. Start now, start small, and stay patient. And please don’t stress over the stress test.




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