The new ‘stress test’ for conventional mortgages comes into effect on January 1, 2018.1
To illustrate, an annual income of $77,800 qualifies for a conventional mortgage valued at $525,000. After January 1, that same income level will only qualify for a conventional mortgage valued at $437,500.2
1 A conventional mortgage is where the loan amount does not exceed 80% of the property value, where the buyer has 20% for a down payment. Alternatively, high-ration mortgages are between 80-95% of the purchase price and require the borrower to pay a mortgage insurance premium.
2 For illustrative purposes only. Consult your mortgage specialist for rates and further details.