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Starting April 19th, anyone wanting to qualify for a CMHC insured mortgage (less than 20% down payment) with a term other than a 5, 7 or 10 year term will now have to qualify at the using the 5 year posted rate (currently around 5.39%).
Currently, if someone wants a shorter term mortgage or VRM most banks use the 3 year discounted rate (approx. 3.5%) to qualify them. This will no longer be the case as anything less than a 5 year term will need to qualify on a 5 year posted.
This will not drastically change what people can qualify for but rather limit what term they can choose. It will funnel more people in the 5 year term.
Again, if you have more than 20% down, this rule will not apply to you.
cheers,
mat
_________________ Mathieu Fugere
Mortgage agent
Licence #M08005933
Office: 416.945.9123
Cell: 416.899.7847
Fax: 905.693.8657
mathieufugere@mortgageedge.ca
www.mortgageedge.ca
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