Verico has released its quarterly economic report. This report outlines the new stress test rules and the implications of these new rule. The stress test will go into effect on January 1st 2018 and will effect the uninsured market. it will now require these new mortgages to qualify at the higher of the Bank of Canada Benchmark Rate (currently at 4.99%) or 2% higher than the contract rate. Along with the new rules this report dives into the problems of the new stress test and how it may effect the housing market.
Along with the new stress test there is a brief discussion about interest rates and how they may be on the rise in the near future. The Bank of Canada is weighing all options after looking at the uncertainty around the NAFTA agreement along with low inflation and the stronger dollar. The response to the new mortgage rules as well as higher mortgage rates will help determine where the rates will go.