Mortgage Made Easy
03-15-2020, 07:56 AM
The New Stress Test Gets Pushed Back - ANNOUNCED Friday March 13, 2020
The easier mortgage stress test that was supposed to start on April 6 will now be delayed indefinitely, says our banking regulator. “OSFI is suspending all of its consultations and policy development on new or revised guidance until conditions stabilize,” it said.
The federal government had planned to change the formula for the benchmark qualifying rate, which would have reduced the stress test from today’s rate of 5.19% to 4.89%.
That means the current minimum qualifying rate—which equals the typical Big 6 bank’s 5-year posted rate—will temporarily remain in force.
This news applies to all default-insured and uninsured mortgages.
--- Posted Rate --- Meaning...
* Today is 5.19%
Is a lender's advertised mortgage rate, typically an undiscounted rate. Posted rates are used mainly for:
penalty calculations
cashback mortgage calculations
determining rate reductions for borrowers who are already approved, in the case where rates are falling.
The easier mortgage stress test that was supposed to start on April 6 will now be delayed indefinitely, says our banking regulator. “OSFI is suspending all of its consultations and policy development on new or revised guidance until conditions stabilize,” it said.
The federal government had planned to change the formula for the benchmark qualifying rate, which would have reduced the stress test from today’s rate of 5.19% to 4.89%.
That means the current minimum qualifying rate—which equals the typical Big 6 bank’s 5-year posted rate—will temporarily remain in force.
This news applies to all default-insured and uninsured mortgages.
--- Posted Rate --- Meaning...
* Today is 5.19%
Is a lender's advertised mortgage rate, typically an undiscounted rate. Posted rates are used mainly for:
penalty calculations
cashback mortgage calculations
determining rate reductions for borrowers who are already approved, in the case where rates are falling.