Has the mortgage stress test served its purpose?
Raphael Ambrozewicz, an advisor with BlueShore Financial in Vancouver, told Canadian Mortgage Professional that even though borrowers aren’t stress tested when renewing with their existing lender, having to go through that process when first taking out their mortgages meant they could at least be confident they’d be able to stomach higher rates.
In the long run, he said, it’s served homeowners well. “It’s worked for fixed interest rate mortgages because if you were getting into a mortgage at 2% or many of them below 3%, but your payment was being stressed at [5.25%], people were prepared to do that,” he said.
“So if they were to be renewing their mortgage today at 5% and there’s no stress testing added to it, because you’re just renewing it… well, the 5% just very much might be here, and you still should be OK to make that payment.”
Read more at the Canadian Mortgage Professional magazine.
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