Bank of Canada changes its qualifying rate each week, today the qualifying rate has dropped down to 5.29%!  This is great news for those first time buyers looking for Variable Rate Mortgages.

What exactly does this mean?

If you are qualifying for a high ratio mortgage (less than 20% down payment), and you are looking for any mortgage term of either less than the 5 year fixed or the variable rate mortgage, you MUST qualify for the mortgage using a rate of at least 5.29%.

Why qualify with that rate?

Most 5 year fixed mortgages are in their low 3%’s now however lenders and insurers feel more comfortable with the borrower having a 5 year stability incase of rate movements on the variable or shorter term mortgages.  With a 5 Year Fixed Mortgage, the payments are fixed for the next five years as opposed to the Variable Rate Mortgage where rates fluctuate 8 times annually.

For more information on qualifying for a mortgage in Vancouver BC, please Contact Us.