When it comes to buying or selling a property, you’ll likely be looking to supplement your savings with a mortgage. it’s crucial to be aware of mortgage interest rates and minimum deposits (a % down on the accepted offer). A common term that you will hear from your mortgage broker is the stress test calculation – a number that establishes what your household income allows you to afford each month for a mortgage payment. The stress test will have a huge effect on how much money you can afford for a mortgage.
A real estate agent’s primary goal is to help all their clients find their ideal property, whether you are trading up, or a first homebuyer, or a commercial developer. For everyone, finding affordable purchases is a top priority.
We are seeing that recent increases to the stress test requirements introduced by the Canadian government in June 2021 are placing a large burden on new home buyers. The government introduced the higher stress test limit to slow the pace of a booming housing market across Canada – at this point, it hasn’t worked. In 2021, there has been 1,080 home sales in Penticton alone at the time of writing; the previous year we had sold 727 homes for the same time period. The government announcement increased the annual qualifying rate to 5.25%, to ensure buyers were not making purchases they could not afford.
For those people whose buying power has been significantly reduced because of the “new” minimum requirements for a mortgage rate, the only solution is to keep paying high rents, try and save more of a down payment, or ask a parent to co-sign on the mortgage. The Canadian Real Estate Association has been pushing for the stress test requirements to be significantly reduced. In the meantime, your professional local real estate agent is key to finding the right property you can afford.
So, if you’ve been looking to buy, get in touch with me today. Whether you’re a first-time buyer or a seasoned homeowner, I can provide the support and guidance that you need to make it a “stress-less” experience.
*** Shannon Simpson is a real estate professional in Okanagan who specializes in providing top-quality results for every client. His passion for offering friendly and effective real estate services has made him one of the most successful and highly-praised Realtors in the local region. Having lived in all three major cities within the Okanagan, he can offer a unique perspective on the regions real estate market, and his services are renowned for their success rates and excellent value!