Recap time...what's happened?
There is so much mortgage news in the news right now, I thought I’d better chime in with an overview on how this affects you.
What? This morning the Bank of Canada lowered their target for the overnight rate by 50 basis points to 1.25%
Why it matters? Movement in the BoC rate is often a strong indicator in a shift in the Prime lending rate which directly correlates to mortgage rates and mortgage qualifying rates.
This is the first change since Oct 2018 and BoC statements accompanying todays announcement tell us that economic concerns related to the spread of COVID-19 are a factor along with a weaker than expected first quarter in 2020.
Keep watching to see if the prime rate changes over the next few days. Next BoC rate announcement is April 15.
What? Stress Test Change for Insured Mortgage
Why it matters? As of April 6, buyers making a purchase with less than 20% down payment will have a new benchmark rate to qualify at. The rate will be adjusted weekly and be based on an average of the 5 year insured rate plus 2%. Last week, we figure the qualifying rate would have been 4.89% vs the actual 5.19%. A difference of 30 basis points…every little bit counts.
Keep watching for further information on changes to the qualifying criteria for conventional mortgages with 20% or more down payment.
These two changes are great opportunity for both buyers and homeowners to take advantage of rates for purchasing, refinancing and investment purchases.