A new mortgage stress test was put into effect earlier this month in an attempt to cool down the red hot Canadian housing market.
After record low interest rates during the pandemic, the new stress test aims to protect buyers who may struggle to make their mortgage payments if interest rates increase in the future.
The new minimum qualifying rate for uninsured mortgages has been raised to 5.25%, an increase of about half a percentage point from where it was before.
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This will reduce the buying power for some Canadian home buyers.
For example, if you qualified for $500,000 under the previous minimum qualifying rate of 4.79%, that amount is reduced to $479,000 under the new…