New Mortgage Stress Test Rules Make Homeownership Tougher

New Mortgage Stress Test Rules Make Homeownership Tougher

Reading Time: 2 minutes

Canada already faces a housing shortage, the new rules on lending makes homeownership more complicated.

(NC) If you’re in the market for a new home or follow real estate news, you’re likely aware of Canada’s new mortgage stress test rules that came into effect in June. While the new rules are designed to help cool the country’s overheated housing market, they also lower a buyer’s purchasing power.

If you’re buying a home, the mortgage stress test requires a bank to confirm that you can still make your mortgage payment at an interest rate that is higher than what you actually pay each month. That qualifying rate has increased from 4.79 to 5.25 per cent.

This means that under the old rate, a couple in the market for a home with a combined annual income of $100,000 and no debts would qualify for a mortgage amount of $535,000. With the new qualifying rate, this couple now qualifies for a mortgage amount of $510,000.

If you’re currently house hunting and are worried that you may not be able to afford a home with these new rules, consider land lease. This option is increasing in popularity because it allows families to purchase their own home without buying the land, making homeownership more affordable.

Plus, homes in many land lease communities offer several other untraditional benefits. For example, Parkbridge, an owner-operator of land lease communities, offers community management, which includes maintaining shared spaces like roads and sidewalks. Many Parkbridge communities also come with shared amenities including pools, golf courses, lawn bowling, fitness centres and more, which are also managed and maintained by onsite teams.

As for getting a mortgage, the process for buying a land lease home is quite similar to buying a freehold home, though you may have to shop around for a mortgage specialist who is familiar with land lease. With a lower purchase price for the same amount of square footage than a freehold home, land lease is becoming a more popular way for first-time buyers to break into the current housing market. Find more information at

More great reading

TDS News
TDS News
News does not and should not dehumanize people for the sake of financial gains, political favours and social media clout.