New Qualifying Guidelines for Mortgages in Canada

Tue, 9th March, 2010 - Posted by Best Rate Guys

Effective April 19, 2010, loans with a fixed rate term of less than 5 years and for all variable rate mortgages, regardless of the term, the qualifying interest rate will be the greater of the benchmark rate or the contract interest rate.

CMHC defines the benchmark rate as the Chartered Bank – Conventional Mortgage 5 year rate that is the most recent interest rate published by the Bank of Canada (the rate is currently 5.39%). This rate is set each Monday and can be found at The Bank of Canada.

For loans with a fixed term of 5 years or more, the qualifying interest rate will be used for qualification purposes.

So in other words, the 5 yr posted rate is the one that will be used for qualifying VRM mortgages after April 19th.

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