Mortgage Broker News ~ February 18th, 2020
Minister of Finance Bill Morneau has announced changes to the benchmark rate used to determine the minimum qualifying rate for insured mortgages.
Instead of the Bank of Canada 5-Year Benchmark Posted Rate, the new benchmark rate will be the weekly median 5-year fixed insured mortgage rate from mortgage insurance applications, plus 2%. These changes will come into effect on April 6, 2020.
The new benchmark rate will be published on a Wednesday and come into effect the following Monday.
“For many middle-class Canadians, their home is the most important investment they will make in their lifetime. Our government has a responsibility to ensure that investment is protected and to support a stable housing market. The government will continue to monitor the housing market and make changes as appropriate. Reviewing the stress test ensures it is responsive to market conditions,” Morneau said.