The Stress-Test Rate Increases to 5.25% on June 1
Monday Morning Interest Rate Update for May 25, 2021
Update on Increase to the Mortgage Stress-Test Rate
Last week our federal Department of Finance confirmed that the stress-test rate used to qualify all default-insured mortgages will also increase to 5.25% on June 1.
This change will reduce every borrower’s maximum mortgage amount by just under 5%.
I’ll be back with my usual more comprehensive update next Monday but in the meantime, here are links to some of my most popular recent posts.
All About Inflation
Inflation is the topic of the day, with most market watchers warning that the current recent run-up is a sign it is about to get out of control.
The Real Reason the Bank of Canada (BoC) Moved up Its Rate-Hike Timetable
I wrote this post immediately after the BoC’s most recent policy-rate announcement, which included the release of its latest Monetary Policy Report.
My post provides highlights from the BoC’s more optimistic forecast and offers my take on the real reason the Bank moved up its rate-hike timetable.
Why the BoC Won’t Raise Before the US Federal Reserve
This post explains why there is almost no chance that the BoC will increase its policy rate ahead of the US Federal Reserve and reminds readers that the Fed is forecasting that its next hike will not occur until sometime in 2024.
The Bottom Line: Five-year fixed and variable mortgage rates held steady last week. There are no major economic announcements pending for the week ahead, and mortgage rates should therefore stay range bound over the near term.