3 ms·
You are correct that in Canada we don't do 30-year fixed mortgages. We only lock in interest rates for a 5 year term. However, we have what's called a stress-t
by cecilpl2 4y ago
You are correct that in Canada we don't do 30-year fixed mortgages. We only lock in interest rates for a 5 year term.
However, we have what's called a stress-test. In order to get a mortgage at the previously low 5-year fixed rates of 2%, you still had to qualify as though the rates were >5%. This means that if rates go up to 5% everyone should still be able to afford their payments.
- steve_adams_86 4y agoThis is all correct. It is worth nothing that other expenses are increasing quickly and consistently, so the stress test could be undermined slightly. I don’t mean to be alarmist or anything here. It has just been on my mind as a recent home buyer. The stress test was performed on my finances under conditions which have already changed (for the worse). I doubt the bottom will fall out of things, but I expect this to bite some people and to hear about it in the medias.