TD –New Mortgage Rules: Buying A Home

The new mortgage rules come into effect on January 1, 2018.
Under the new Canadian mortgage rules, home buyers who a down payment of 20% or more will be subject to a stress test. The stress test will use either 5-year benchmark rate published by the Bank of Canada or customer's mortgage interest rate plus 2%, whichever is the higher.

Imagine you're looking at buying a home for $500,000 and have 20% to put down. At 3.3% with a 25-year amortization, your mortgage payments would be approx. $2,000/month. If we apply the stress-test rate of 5.3%, your mortgage payments would increase by approximately $400 to just over $2.400/month.