How rising mortgage rates affect insured mortgages
At a glance (1 minute read)
- Recently, chartered banks raised their posted mortgage rates in response to higher bond yields.
- Currently the five-year posted rate is 6.04 per cent.
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 PPT) |
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