How rising mortgage rates affect insured mortgages
Tuesday, August 9, 2022
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 |
*June 2022
benchmark price for a condominium in Greater Vancouver
Notes
- Mortgage rate shown is before and after the June 22 mortgage rate increase to 6.04% from 5.39%.
- Calculation based on 15% down payment amortized over 25 years.
- Property Transfer Tax Fact Sheet