Is your mortgage renewing this spring? Are you concerned you may not qualify under the new mortgage rules? Then this newsletter is for you.

Two years ago there was a new stress test applied to insured mortgages. This required buyers with less than 20% down payment to qualify based on a mortgage payment calculated at the Bank of Canada Qualifying Rate (aka Benchmark Rate) instead of their contract rate, or the rate they actually get. It effectively dropped buyers' maximum mortgage amounts.

But there is a little-known loop hole to the new stress test that could save you a lot of money. I have had several people tell me they are not shopping lenders or rates at renewal because they do not think they will qualify under the new stress test. Lenders know this and many of them (particularly credit unions and big banks) are offering inflated rates to their renewal clients. Don't miss out on the savings you can get from a switch!

Insured Mortgages Best Rates and Stress Test May Not Apply

For an insured mortgage that closed prior to Nov. 30th, 2016, that mortgage can be transferred to another lender qualifying at the 5-year fixed contract rate (ex. 3.69%) they get instead of the tougher stress test rate (5.34% currently). Your mortgage insurance can also travel with your mortgage to the new lender. This means that not only do you qualify under the easier guidelines, but you also have access to todays best rates which are given to those with insured mortgages.

Where This Does Not Apply

Here are situations where this loophole does not apply:

• Your mortgage is no longer insured because you have refinanced or changed the structure of the mortgage

• You had more than 20% down when you initially purchased

• You want a variable rate mortgage or fixed rate shorter than 5-years - these still need to qualify at the higher Benchmark Rate.

• Lenders who do not honor this policy - this is where a broker can help!

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Call Me and Call Early

More and more lenders are counting on you not to shop your mortgage rate at renewal. Keep more money in your pocket! Call me to confirm what your options are at renewal. And call early you can hold a rate up to 4 months ahead of your maturity/renewal date!

If your renewal is further out and you want to be reminded, just send me a note and I'll set you up with a renewal reminder so you hold a rate early. In an increasing rate environment, being early to hold a rate at renewal can translate into significant savings!