Mortgage Stress Test is Pushing Young Canadians and Newcomers Out of Housing Market
Matrix Mortgage Global – Mortgage Stress Test is Pushing Young Canadians and Newcomers Out of Housing Market
According to a recent study conducted by the Canadian Real Estate Association, the mortgage stress test that was introduced by the federal government in January of these year had the biggest impact on young prospective home buyers as well as new immigrants to Canada, pushing many of them out of the market.
New stress test makes it more difficult:
- The new stress test makes it more difficult to qualify for an uninsured mortgage with a federally regulated lender. Those who do qualify, will often qualify for less of a mortgage than they originally wanted, so they will either have to buy a less expensive home, or they will have to wait longer and save.
- The result has been a slowdown in Canada’s housing market. Another side effect of the stress test is that because young people are waiting longer to buy a home, there are less vacancies in rental properties and rents are going up.
Finding a solution to help more millennial’s:
The Mortgage Professionals Canada Industry group recently took this issue to Parliament Hill. They are meeting with MPs in the hopes that they can find a solution to help more millennial’s and new immigrants to Canada to be able to qualify for mortgages so that they can buy homes.
Some experts are even questioning why the stress test had to be implemented in the first place since Canadian defaults on mortgages have always been extremely low. In fact, even prior to the stress test the rate of default was less than 25 out of every 10,000 Canadian mortgages.
- It is unknown at this point whether the federal government will ease up on the stress test, but fortunately buyers who are unable to pass this test do have other options available to them.
- This is because the requirement only applies to mortgages with federally regulated lenders. There are still provincially related lenders such as credit unions as well as alternative and private lenders that are not required to implement the stress test.
- Young Canadians and newcomers who wish to qualify for a mortgage but who are concerned about the stress test should get in touch with a professional mortgage broker who can help pair them with an appropriate lender for their situation.
At Matrix Mortgage Global, we work with a large pool of lenders and we can help you get the mortgage that is right for you. Call us today to get started.
At Matrix Mortgage Global, we can help you get started on this path. Call us today at 1-877-371-5293.