No More Stress Test When You Shop For Next Mortgage Renewal

If your uninsured mortgage is coming up for renewal soon, an upcoming policy change will likely make you very happy.

The Office of the Superintendent of Financial Institutions, otherwise known as OFSI, has confirmed that starting November 21, 2024, borrowers with uninsured mortgages will no longer be subject to a stress test when switching lenders.

Do You Remember The Stress Test?

Back on June 1, 2021, the Canadian government required borrowers to qualify at a higher interest rate in order to prove they could afford mortgage payments. This meant that if you applied for a mortgage at a bank, your income would have to qualify for the higher of either of these two:

A rate of 5.25%
Your interest contract rate + 2%

And if you already had a mortgage, the stress test would apply when you:

Refinanced your home
Switched to a new lender
Took out a home equity line of credit

At the time, this limited affordability for many buyers getting into the real estate market.

What does the new rule change mean?

Although the mortgage stress test will remain in place, a borrower can now shop around for another lender at mortgage renewal time without being subject to the stress test. Currently, exemption only applies when a borrower renews with the same lender, and the rule change is meant to give borrowers more choice for better rates in the marketplace.

Regulators are also aware of the difficulties of qualifying at 2% higher in a high interest rate environment. This rule change is certainly coming at the right time, and is a small win for Canadian homeowners.

If you’re ready to renew your mortgage and would like to explore other lending options, Team Paliwal has a wide network of bank mortgage specialists and mortgage brokers that we can refer to you. Contact us today and we’d be happy to share our expert resources with you.

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Me and my wife Harshita comes with a background and strong belief of having the blessings of elders is ultra-important. Our signing the contract was purely because of Team Leader Gyanesh Paliwal. We really liked his knowledge, experience and as an elder and like a family member. Given this was our first Home experience and we were super anxious, on the closing day when we both were missing our parents the most to hear that voice go for it, you played that role. It was your voice in the end saying go for it gave me the courage to say yes. We hope that this would turn out to be one of our best decisions. In future we would love to work with you from the start till the end.

- Amit Arora, October 2023

It’s been an absolute pleasure working with Akanksha and Gyanesh Paliwal of RE/MAX Team Paliwal. What started as a relationship with our real estate broker quickly evolved into a personal connection. The team has a deep understanding of the housing market but what stood out was always their attention to our unique needs. Gyanesh and Akanksha took out time to educate us as first time home buyer about the process of searching and purchasing a home before diving into the real home hunt. Akanksha’s approach to shift through the inventory and filter it down to our needs was very methodical which made it easier for us to make the final decision.

- Nimish Sharma, October 2023

We wanted to take a moment to express our deepest gratitude for the outstanding support and guidance both of you provided throughout our investment property journey. Your expertise, dedication, and unwavering commitment played a pivotal role in helping us secure the perfect investment property. From the initial discussions about our requirements to the countless conversations around pricing and property types, your patience and professionalism shone brightly. Your in-depth knowledge of the real estate market and keen understanding of our needs made the entire process smooth and stress-free. RE/MAX Team Paliwal’s valuable insights not only saved us time but also helped us make informed decisions, ensuring that we found a property that aligns perfectly with our investment goals.

- Ruchi Naik, October 2023

I wanna share my experience with Re/Max, Gyanesh Paliwal and his team, when the idea of buying house came up in our minds, we called Remax team Paliwal they explained everything in details, and kept following up with us till we made the decision to buy the house, then we met Gyanesh Paliwal, and they did everything to make us understand all the details of buying house as that was our first time, then the journey of viewing houses started, we visited tens of them in different places, they gave us opinion about each house, if any of them is in bad location or has something bad, they right away told us about it, then we came to the point that we found the house that we loved.

- Mohamed Elghazaly, October 2023

I was thinking of making an investment in GTA market. RE/MAX Agent Gyanesh Paliwal’s name was strongly recommended by my family. Gyanesh suggested me a few hand-picked great projects. He provided me full analysis of the project from a top builder. His support to make the right decision is great and he also coordinated and communicated with the builder on my behalf to complete the whole buying process.

- Anu Chadha, August 2023