Just want to clarify a few things...
- Qualifying rate is the greater of benchmark rate (5.25%) vs contract rate + 2%.
- Maximum amortization on an insured ( <20% down) mortgage is 25 years.
- Maximum amortization on an uninsured ( >20% down/equity) mortgage is 30 years. You CAN qualify on a 30-year amortization at contract rate + 2%. 30-year amortizations do come with higher interest rates however
- If debt servicing ratios are tight, it typically makes most sense to go with a variable rate, as you can then qualify at the contract rate + 2%. For example, with prime rate going up to 5.45%, some variable rates can be found around 4.45%, meaning you can qualify at 6.45%. If you go fixed, most are around 4.60%, meaning you qualify at 6.60%.
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