How rising mortgage rates affect insured mortgages
On June 22, 2022 chartered banks raised their posted mortgage rates in response to higher bond yields.
A home buyer with less than a 20 per cent down payment is required by the federal Office of the Superintendent of Financial Institutions (OSFI) to obtain an insured mortgage and pass a stress test.
This stress test adds an additional two per cent to the five-year posted rate unless the contract rate is higher.
Currently the five-year posted rate is 6.04 per cent.
Here’s what this latest change means to the buyer of a benchmark price condominium in Greater Vancouver.
Impact of June 22, 2022 mortgage rate increase
|Benchmark price*||Mortgage rate||Total price (inc PTT)||Down payment||Loan amount||Monthly principal and interest||Income required|
|Before June 22, 2022||$766,300||7.39%||$779,626||$114,945||$651,355||$4,720.10||$201,576|
|After June 22, 2022||$766,300||8.04%||$779,626||$114,945||$651,355||$4,987.87||$212,286|
benchmark price for a condominium in Greater Vancouver