Is Another Rule Change for Mortgages Coming?

This is important for homeowners. Interest rates went up twice already just this summer. Is it time to 'lock-in' your mortgage if it is on variable rate? Read this article to find out more! Another rule change may be forthcoming in terms of qualifying for a mortgage - as you may already know buyers with less than 20% down payment are required to qualify not on the prevailing market rate but with the BOC 5 year qualifying rate of 4.84% right now which they have termed 'stress test'.. This may soon be extended to those with more than 20% down payment if approved. This will simply mean that it will be harder to qualify for a mortgage since more income will be required than the present way. Is this an incentive enough for buyers or up graders to act sooner than later.

After rate hikes, Canadian housing braces for 'biggest rule change of all time'.  

 by Gary Marr as excerpted from Financial Post

Interest rate hikes might be the last thing the housing market needs as sales in Toronto plunge and Ottawa considers even tougher measures for qualifying for loans.

It didn’t take long for the impact of rising rates to hit the market. People rushed to lenders Thursday to lock in contracts and get pre-approved mortgages after the Bank of Canada raised its overnight lending rate the day before.
While the short-term impact of rising rates usually means a temporary buzz of sales activity, the larger concern is what two hikes in the overnight lending rate in two months – another one is possible in October – will do to a housing industry that has seen its largest market in the Toronto area already under siege from provincial rule changes that targeted investors and foreign buyers.
On the horizon in terms of tighter credit regulations is a new rule from the Office of the Superintendent of Financial Institutions that would target home buyers with down payments of more than 20 per cent with a tough new stress test: they would have to qualify based on a rate 200 basis points above their contract.
“It could be the biggest rule change of all-time,” said Rob McLister, the founder of ratespy.com. The housing market has already been adjusting to changes in the insured market, instituted in 2016, which forced homeowners with less than a 20 per cent downpayment to qualify based on the Bank of Canada five-year qualifying rate as opposed to the one on their contract. That rate is now 4.84 per cent.