The Federal Government made a change today in the so-called “stress test” home buyers face when qualifying for a mortgage.
The rate at which a prospective buyer must be able to make payments at has been raised to 5.25 percent. This is 2 percentage points above the current borrower’s rate – whichever is higher. This is an increase of half a percentage point of what it was previously.
The stress test was launched in 2017 to cool down a then overheated market.
The average buyer looking at a home for $400,000 with $100,000 down would cost the buyer $1270 at average current market rates of around 2 percent.
Under the stress test they would have to handle $1788 per month (40 percent more every month) to qualify.
