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By Kim Do 

New homeowners might be able to afford their mortgages at current rates, but what happen if interest rates begin to rise? As of October last year, mortgage insurance rules stated that some lenders must invoke a “mortgage rate stress test” that assesses a borrower’s ability to make payments if rates increase. Currently, this requirement applies to a subset of insured mortgages with variable interest rates or fixed interest rates with terms less than five years.

To qualify, the mortgage’s amortization period must be 25 years or less, in accordance with CMHC mortgage rules. The benchmark qualify rate for insured, high-ratio mortgages is 4.64 per cent. Borrowers will now have to qualify based on the 4.64 per cent interest rate if they want to choose a variable or a 1-to-4-year fixed term if you’re putting down less than 20 per cent. The buyers need to have a credit score of 600 or more. With the new rules, this could mean that many first-time homebuyers will not qualify for a mortgage.

General Mortgage Loan Insurance Qualifications

  • The home is located in Canada.
  • For CMHC (Canada Mortgage and Housing Corporation) insured mortgage loans, the maximum purchase price (or as a improved property value) must be below $1,000,000.
  • Normally, the minimum down payment comes from your own resources. However, a gift of a down payment from an immediate relative is acceptable for dwellings of 1 to 4 units.
  • For eligible borrowers, additional sources of down payment, such as lender incentives and borrowed funds are also permitted.

Check with your lender for qualifying criteria and availability.

Current Variable Rates

  • Prime-50: 2.70%
  • 0.50: 2.2%

Fixed Rates

  • 2 Years: 2.29%
  • 3 Years: 2.34%
  • 4 Years: 2.59%
  • 5 Years: 2.79%

Kim Do is a licensed mortgage agent since 2007 and currently works with Mortgage Bridge Canada. She can be reached at