FINANCIAL FITNESS
DOLLARS and Sense Plan for the future in your home-buying budget
>> IT SOUNDS LIKE A HEALTH SUPPLEMENT , and in today’s financial climate, it seems the new federal B-20 mortgage stress test is good for consumers’ financial well-being. You might think of it as immunization against rising interest rates. Since Jan. 1, federally regulated financial institutions have been required to apply the B-20 guideline to uninsured mortgages, verifying that home buyers qualify for their contracted interest rate plus two per cent or the Bank of Canada’s benchmark, whichever is higher. “The banks are required to do a stress test by law. However, I think it’s a really great idea for consumers to do that for all aspects of lending, not only for mortgages,” says RBC mortgage specialist Donna Lagimodiere. “Take the time to consider what a potential one-per-cent increase in interest rates will mean in dollars and cents to your mortgage payment in the future.” The new guidelines handed down by the Office of the Superintendent of Financial Institutions are meant to ensure home buyers will be able to cover their mortgage payments and help to maintain a stable housing market.
By Pat St. Germain
THE BANKS ARE REQUIRED TO DO A STRESS TEST BY LAW. HOWEVER, I THINK IT’S A REALLY GREAT IDEA FOR CONSUMERS TO DO THAT FOR ALL ASPECTS OF LENDING, NOT ONLY FOR MORTGAGES.
48 Parade of Homes fall 2018
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