Why was the Stress Test Implemented?
The Canadian government implemented the stress test to attempt to control the rising prices of the real estate market.  It is also to ensure that Canadians do not put themselves at risk and assume mortgage debt that they cannot manage if interest rates were to rise.  So far, predictions say that their attempt will likely work.  For one, the bidding wars on houses will decrease, as home buyers realize that they are not able to bid as much as they want.
Moreover, first time home buyers may feel the effects of the stress test, too.  First time home buyers may want to consider renting instead of buying, or at least until they can save enough money to achieve a 20% down payment to avoid passing the stress test.  For others, their future may look the same.  The stress test might cause some to spend more time as a tenant than they originally expected, or at least until they can save enough for a 20% down payment.
In some parts of Canada, if the average housing price is $500,000, then the stress test does not seem to be creating that much of a buzz. The primary targets of the test are really the hot real estate markets with the average housing price reaching $1M, such as Toronto and Vancouver.
Didn’t Pass the Stress Test?
The stress test may be the only thing separating you from your dream house, but don’t be disappointed. Even if the bank rejected you, contact Maple Leaf Mortgages! Call us at 905-886-5323, visit us online at www.mapleleafmortgages.com/online-application/ or in person and one of our experts would be pleased to help you!
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