Bank of Canada Keeps Interest Rate at 1%
Wednesday Oct 25th, 2017Share
The Bank of Canada left its benchmark interest rate unchanged. This is following two straight hikes. It's suggested that future increases are still likely, but at a gradual pace. Read more here.
There was also the announcement of new mortgage stress tests to come in January 2018. Home buyers who don’t require mortgage insurance (i.e. CMHC) because they have a 20% downpayment will have to prove they can manage to keep a mortgage if interest rates rise above the five-year benchmark rate published by the Bank of Canada or 2% higher than their contracted mortgage rate, whichever is higher.
Home buyers, especially ones who want to move up in property size to accomodate growing families, are the primary victims of this change. If someone who wants to buy a home today and is approved for a mortgage of $400,000, they most likely won't be approved for the same mortgage come January 2018.