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New mortgage stress test rules have a loophole

Looks like there’s a loophole in Canada’s new mortgage stress test rules announced this week that means buyers could qualify for a larger loan than it first appeared. The new rules are meant to ensure that borrowers who have a down payment of 20 per cent or more will be able to meet their mortgage payments if interest rates rise significantly. In many cases, the new rules mean that those borrowers will be eligible for a smaller loan than they are at present. However, by increasing the amortization period of the loan, those borrowers can increase the amount they borrow while still passing the test. Full story

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