Calgary Mortgage Rule Change Effecting Home Buyers.

I think the latest Mortgage rule change is fluffy at best.

The MRQ is a qualifying interest rate, set by the Bank of Canada, to qualify Mortgage applicants who want adjustable rates or shorter than 5 year term Mortgages.

Last week, this interest rate increased, from 4.64% to 4.74%, which is very puzzling to me.

Here’s why:

• Most people are going with a 5-year fixed interest rate so the MRQ isn’t applicable to Mortgage applicants most of the time.
• We are in a decreasing interest rate environment, so raising this rate is purely a policy change, not a function of the market.
• Are policy makers aware this change has little to know effect on the Mortgage market?

Honestly, because this is so puzzling, a part of me worries about other potential policy changes to the Mortgage market.

This seems like our Government is positioning themselves to report they have done “something” to cool hotter Real Estate markets in Canada.  However, I think the reality of this policy change will have little to no effect on Mortgage qualifying for home purchases or Mortgage refinancing.

If you would like to understand your Mortgage affordability, and how little this 0.10% change in the MRQ makes to your purchasing power, connect with me to discuss.

Cheers,

Chad Moore