Hey what's going on? So today we're gonna be talking about some of these new mortgage changes that are being implemented and pushed through the pipeline and what they mean for you guys moving forward So, if you haven't heard, what's happened is OSFI, which is Canada's leading financial regulator, has proposed a rule change that all mortgages go through a stress test when getting an approval
So what has been the process so far is, if you were an insured mortgage which means if you're going with generous CMHC, if you're putting less than 20% down, you had to go through the stress test, and what the stress test is, is let's say you're getting the mortgage rate of 23 percent, you would still have to qualify as if the mortgage rate was their posted rate, which would be 48% or 5%, whatever the situation may be All that does is make sure that you've got a comfortable buffer in the event interest rates go up Now what they're saying though is, instead of just doing that for only insured mortgages they want that to encompass everything, so about forty five percent of the mortgages out there are uninsured, which means people have put more than twenty percent down
Again, please keep in mind, most mortgages, if you're doing less than five years, so if you had a one year variable, or three or fixed, you still have to qualify at the five year posted rate or MQR as I've been told, which is the mortgage qualification rate So it's not a huge change guys, it's not a huge ordeal that we're all seeing all these agents saying "oh my god the sky is falling, the government's getting involved" It's not as bad as they're making it sound, they're just implementing some changes to protect us in the event that mortgage rates start going up We've gotten way too spoiled with extremely cheap money It's not normal, it's not healthy, and the music's going to stop one of these days
So these are things that they're gonna have to implement It is gonna have a drastic effect on the market because obviously less people are gonna be able to afford a higher number of higher valued properties, but you know, they should be stretching themselves that thin anyways, alright When you actually break down what you're getting approved, you shouldn't utilize every dollar the bank's throwing your way anyways I believe the rate is 40% of your total debt service can go towards mortgages or towards debt Forty percent is a fairly large number when it's pre-tax, but talk to a mortgage rep based on that, I don't want to misquote anything
Mortgage reps – please go easy on me in the comments if I messed up a couple things, but please point out if I've gotten anything wrong because I'm always looking to improve as well Now, is this good or is this bad moving forward? I think it's a necessary step, however, the few things that bother me is the timing of it, I think we just had these huge changes get implemented in April, we haven't even had a full year to see exactly how things are gonna shake out We've already seen a huge decrease in property values, it's shaking up the market quite a bit, so I feel like we should just give ourselves a little bit of time to kind of get stabilized and figure out what's going on, but they're just kind of throwing it down and seeing what happens Also, I keep getting these numbers thrown at me saying "$168 of of debt for every dollar of disposable income Canadians have"
We're pretty indebted as a country and as a nation, however, I'd like to point out: I don't think that's it's primarily real estate, I think it's also to do with our our credit cards, car loans, and things like that So I think there's bigger debt issues at hand as opposed to our financing for our mortgages, so I think we're just getting picked on in that sense, but I don't think it's as big as a deal that people are making it out to be It just means that if you're trying to buy, you know $750,000 at the max value the bank's giving you, it's going to be pre-approved at a lower rate, but again, any questions, comments, what do you guys think about this? Do you think the government's getting too involved with everything? I'd love to hear what you think! Comment below But any questions: Jacob@soldbyjacobcom, Facebook, Instagram: Soldbyjacob
com and as always, thank you so much for watching, have a good one guys!