Worried you won’t pass the Mortgage Stress Test at renewal?
Don’t “stress” just yet. There may be options for you.
Federally regulated lenders will no longer apply the Minimum Qualifying Rate (MQR) for mortgages at renewal. This is new as of November 21, 2024.
What is the Minimum Qualifying Rate?
The MQR is a form of stress test required by lenders that will limit the mortgage amount borrowers can qualify for when applying for a mortgage. If the borrowers aren’t able to respect the debt ratios, they will have to either bring more equity (downpayment) to reduce the borrowing amount or reduce their borrowed amount.
However, a recent change to mortgage rules means you can now skip the stress test at renewal time for your mortgage if you’re switching lenders and the following applies:
- you are transferring the mortgage from a federally regulated institution
- the mortgage amount is remaining the same
- there are no increases in your mortgage amortization period
More new mortgage rules in Canada
As of January 15, 2025, eligible homeowners can get an insured refinance for construction funds up to 90% of their improved property value for secondary suites. This can be extended to a 30-year amortization.