What Do Mortgage Rule Changes Mean for Calgary Personal Financial Planning?

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Mortgage Rule Changes Calgary

What Do Mortgage Rule Changes Mean for Calgary Personal Financial Planning?

Buying a house is often one of the biggest lifetime purchases individuals or families make. Because entering into a mortgage is a commitment that will last many years, it is important to explore all options and gain a strong understanding of the details before choosing the best course of action. The Calgary insurance specialists on our team are committed to providing personal financial planning tips, suggestions, and facts in posts like our recent overview of mortgage loan insurance. Today’s post provides further information on insurance related to mortgages.

According to the Canadian Bankers Association, Canadians are typically prudent homeowners, based on the measure of the number of Canadians who are making their mortgage payments on time. However, consumers, banks, and the Canadian government all have a role to play when it comes to making sure that the mortgage and housing markets remain stable, and that is why the government sometimes takes actions to respond to factors such as interest rates and how the housing market is operating.

Two recent actions that may affect home buyers are changes to mortgage insurance eligibility requirements as well as the expansion of the “stress test” requirement.

Mortgage Insurance: What Calgary home buyers should know about the “Stress Test”

Another key changes related to mortgages is that all home buyers seeking an insured mortgage--regardless of how much they have for a down payment--will be subject to a mortgage rate stress test.

  • A stress test is designed to determine whether or not the borrower can still make payments on their loan in a situation where interest rates rise, or their financial situation changes.
  • The stress test also examines what percentage of the borrower’s income is spent on things related to housing, such as mortgage, taxes and heating, as well as their total amount of debt.

The stress test is not a new measure, but it was previously only applied to “high ratio” mortgages; in other words, when the borrower was making a down payment of less than 20%.

Get in touch with a Calgary insurance specialist

These changes may affect the type of mortgage or home certain Calgary families attempt to take out. Because of this, the expertise of an insurance specialist can be beneficial when it comes to understanding changes in insurance requirements, regulations, and details. For a detailed understanding of how changes in the larger mortgage insurance system can affect your personal financial planning, Calgary insurance specialist Denise Higginson and her team can help.

Learn More

For more information on Mortgage Rule changes, contact us at (403) 299 1290.

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