Need a new mortgage?: Understand the qualifying rules


There are new rules coming into effect on January 1st 2018 that will affect Canadians' ability to get a mortgage, and for what amount. These rules are not limited to people looking to purchase a home with a mortgage, but also apply to those looking to refinance a home. 

Stress Test: 

The most noteable change is the introduction of a "stress test" rule for all new mortgages. This will drastically affect borrowers' ability to qualify for a mortgage, and for how much. It means that a borrower will have to qualify for a higher rate than they are actually getting on their mortgage, in an effort to protect borrowers from a crisis should rates rise. The Bank of Canada sets a "5 year benchmark rate". In order to qualify for a mortgage in January under the new rules, a borrower must qualify for a mortgage at the greater of the 5 year benchmark rate, or the current rate on the mortgage plus 2%. (So if you are getting a 3% mortgage, you have to qualify for a 5% mortgage.) This will affect the amount the borrower will be approved for. The estimate is that on average it will be 20% less than if they had been approved under the current rules.  

Next Steps:

The time is now. Speak to your mortgage professional and discuss your options. If you are able to do it, getting your mortgage prior to the new year may be a good option. If not, you will need to be aware of the new rules, and expect that you may be approved for less. 

Moving Forward: 

There are a lot of things to consider when you decide to buy a home, sometimes it can be overwhelming.  If you have any questions about making this decision we offer a flat fee consultation service. You can come to chat and ask questions. We'll give you some advice about your options and what your next steps might be. There is no commitment after the consult. If you have decided to go ahead, and wish to retain us we would love to work with you. You can find our information at:

Back up links:

If you have any questions about mortgages you can call us at (902) 826-3070 or email us at to set up a meeting with one of our lawyers at our Tantallon law firm. You can also schedule a no commitment Issue Review Consult for $100+HST where you have the opportunity to explain your situation to a lawyer and get basic advice before deciding whether or not you'd like to retain us.  

By: Dianna M. Rievaj, MBA, LLB - Founding Lawyer

The information and materials on this blog are provided for general informational purposes only and are not intended to be legal advice. Nothing contained on this blog is legal advice or constitutes a legal opinion. While it is our goal to provide information which is current, legislative changes and court decisions, among other matters, may result in some information no longer being current or accurate. You should consult a lawyer before relying on any information. The views expressed herein by individual contributing lawyers posting entries to the blog are solely those of the authors and should not necessarily be attributed to or considered representative of the firm of Highlander Law Group Lawyers