Are you a homebuyer who got rejected for a mortgage in the recent past because the mortgage stress test was too high? I have good news to share with you.
BMO and other banks have recently introduced an ultra-low, variable-rate mortgage product of 2.45% while increasing rates on fixed products. The current mortgage stress test requires you to qualify for a mortgage with a contract rate plus 2%, so I suggest you reapply for a mortgage with a variable mortgage rate in mind.
This will make your qualification rate 4.45% versus a five-year benchmark rate of 5.34%. In real terms, this is a mortgage approval difference of between $35,000 and $50,000, depending on your expenses and income.
If you can’t qualify for a mortgage with just income, keep shopping and do not give up. Banks want your business, and they will bend over backwards to get something done for you. I have spoken to a few mortgage brokers, and they have mentioned that some mortgage products are available for certain banks, while others are not.
For example, Scotiabank is really good for qualifying non-resident and new immigrant programs, while National Bank is good if you already own a home and are thinking about upgrading.
If you have any other mortgage questions, I know several experts I would be glad to refer you to. If you have any other real estate needs, please feel free to reach out to me. I would be glad to help you.