Mortgage Broker in Victoria, BC releases New 2018 Canadian “Stress-Test” Mortgage Affordability Calculator.

VICTORIA, BC – 01-01-1970 (Press Release Jet) — Mortgage Broker in Victoria, BC releases brand new 2018 Canadian “Stress-Test” Mortgage Affordability Calculator.

Since the release of the new OSFI Canadian National Mortgage Guidelines there has been notable borrower confusion and concern around the so-called mortgage “Stress-Test”.  “Borrowers definitely have a lot of questions about the new stress-test rules.”, says Andrew Libera, founder of and a licensed mortgage broker in Victoria, BC. “Prices here are rising quickly and our purchaser clients are understandably trying to maximize their buying power. There is a sense that they can be priced out of the market if they wait. They want to buy now and take advantage of the low fixed rates for the next five years.  But with the new rules taking effect, the small details of an application can make a big difference.  So we built a simple online calculator that takes those details into account.”   The calculator takes into account that some lenders have underwriting policies that can allow for a slightly larger mortgage. “Borrowers don’t always need that extra, but they want to know what their maximum purchase price could be”, added Mr. Libera.

“In a competitive market like Victoria where we continue to see multiple offer situations on many home purchases, borrowers want to know what their purchase ceiling is.  It makes sense, particularly for younger borrowers who can see wages rise appreciably over a few years.  So our job is to let borrowers know what that maximum purchase price is for their unique situation. The challenge is that now, with the stress-test qualifying rate a minimum of a full 200 basis points over their actual contract rate, many home shoppers are shocked when they see how little they can borrow. The calculator allows them experiment with different values in private, and when they’re ready to discuss options we work with them on the details.”

“Not only are clients unhappy with the new stress-test rules, I think it’s safe to say that very few knowledgeable people in the housing and finance industry are happy about the new rules. Now that many buyers with excellent savings, income and credit will be sidelined for years depending on local house prices, the rental property market will be even more lucrative for investors, driving up property prices even further.  We are already working with extremely low rental vacancy rates in Victoria. In the worst case this could lead us away from a home ownership dream and toward a long term renter mentality.  If buyers start to feel like home ownership will never be a possibility for them they may give up on home ownership as a goal.  The family home is a critical store of value and a forced savings in many ways. Without the family home there is far less incentive to build a solid financial foundation over the long term. Everyone in the housing industry who is seeing this as the possible outcome hopes the policy will be revised soon. In the meantime we are focused on helping our clients buy homes for their families. That is our role as mortgage professionals.”

We encourage you to check out the new online stress-test mortgage affordability calculator.

Contact your trusted local mortgage professional for specifics on mortgage qualification.

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Full Name: Andrew Libera
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Sarah Tulowitzki

About the Author: Sarah Tulowitzki

Sarah holds a Master’s in Journalism from Ryerson University and writes professionally in a broad variety of genres. She has worked as a senior manager in public relations and communications for major telecommunication companies, and is the former Deputy Director for Media Relations with the Modern Coalition. Ashely writes primarily in our personal finance section.

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