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OSFI’s new mortgage stress test may arrive sooner than you think

OSFI’s new mortgage stress test may arrive sooner than you think

Date Posted: October 27, 2017

With the release of the new mortgage rule changes, many consumers are left with questions as to how this is going to impact their situations going into the new year. As a general rule, institutions are encouraged to comply with these new changes as soon as they can meaning some lenders may adopt the changes sooner rather than the January 1, 2018 deadline. Working with your Mortgage Broker is a great solution to help navigate the changes and help you select a lender and institution that best suits your needs.

Here are some important points for consumers:

  • Existing mortgage applications: If you’ve received approval for a mortgage already, the new rules won’t affect your mortgage, regardless of when it closes. So if you've already received your mortgage approval for your January 5th, 2018 closing date and are able to satisfy the requested conditions you will not be subject to the new rules.
  • Preapprovals: Banks should honour existing preapprovals issued under the old rules until those preapprovals expire. For preapprovals issued between Oct. 17 and Dec. 31, 2017, the lender can choose which rules to apply (unless they’ve implemented the new stress test prior to the deadline). The OSFI suggests confirming the conditions of your preapproval with your Mortgage Broker or lender, just to be safe.
  • Applications in the new year: The OSFI states that if you get a mortgage from a federally regulated lender such as a bank after January 1, 2018, then all loan applications or pre-approvals will be subject to the new rules. There are no exceptions, even if you signed your purchase agreement before the new rules were announced.

Contact your Mortgage Broker for further information on how these new rules may affect your application.

Click here to read the full Globe and Mail article on the globeandmail.com