I’ve heard rumours the past few weeks about a new and tougher “stress test” for those taking out a mortgage next year. What’s going on? – Nervous Buyer
DEAR NERVOUS: The Office of the Superintendent of Financial Institutions (OSFI) is setting a new minimum qualifying rate for mortgages (referred to as a “stress test”), effective January 1st. With home values on the rise in many parts of Canada, the change is to help ensure that mortgages remain affordable for homeowners, even if interest rates rise.
In short, all buyers wishing to take out a mortgage with one of the major banks will be subject to stress testing, regardless of their down payment or terms. Homebuyers who put less than 20 per cent down on their mortgage (often first-time buyers) are currently subject to stress testing and are also required to have mortgage insurance. As of January 1st, the stress test will apply to everyone, including uninsured mortgage holders with down payments of 20 percent or more — a group that was not previously subject to heavy regulations.
OSFI’s expanded regulations (known as B-20) are designed to assess a borrower’s financial situation, assuming they would have to pay back their mortgage at either the five-year average posted rate, or at two per cent higher than their actual mortgage rate — whichever is higher. This will apply to new mortgages, but not mortgage renewals. So if you have pre-approval from the bank and have not yet purchased, or are considering buying a home in the New Year, you’ll want to check with your mortgage advisor to see how these changes might affect you. If you don’t have a mortgage advisor, drop me a line and I’ll be happy to recommend someone.
I own a business downtown and arrived today to find graffiti on my property. What’s the best way to deal with it? – Frustrated Owner
DEAR FRUSTRATED: This type of vandalism is illegal and should be reported. The easiest way to do so is by calling the Waterloo Region “Graffiti Busters” hotline at 1-855-TAG-FREE (1-855-824-3733), or by contacting the Waterloo Region Anti-Graffiti Alliance. You will be asked to provide as much information as possible about the graffiti’s location, so that efforts can be made to reduce the spread of this crime in our community.
That said, graffiti removal is the responsibility of the property owner and it is up to you to ensure that markings are removed, painted over or permanently blocked from public view. The faster this can happen, the less likely it is that the area will be tagged again.
In the future, if you witness graffiti vandalism in progress, I encourage you to call 911 immediately and report the crime to police. A person caught committing an act of vandalism can be charged with mischief and required to attend court.