The Canadian mortgage landscape is evolving, and as of November 21st, homeowners have a unique opportunity to switch lenders without undergoing a stress test. If you’re a homeowner in Ontario, this is the perfect time to shop around for better mortgage rates. Here’s everything you need to know to take full advantage of this opportunity before the year ends.
What Changed on November 21st?
In Canada, homeowners typically need to pass a mortgage stress test to switch lenders, which ensures they can handle mortgage payments if rates rise. However, as of November 21st, 2023, there’s an exception:
- You can now switch lenders without being stress-tested.
- This applies primarily to those renewing an existing mortgage.
This is a golden opportunity for homeowners to find more competitive rates without the additional financial hurdles the stress test poses.
Why This Matters to Ontario Homeowners
Ontario, specifically the Greater Toronto Area (GTA), has seen significant real estate activity, but many homeowners face higher mortgage payments with rising interest rates. By switching lenders without a stress test:
- You can access lower rates – Shop around to find the best mortgage terms that suit your financial goals.
- Leverage competition – Your current lender will likely offer competitive rates to keep your business.
- Save on interest costs – Even a small drop in interest rates could save you thousands over your mortgage term.
Now is the time to negotiate or explore other lenders.
How to Take Advantage of This Opportunity
- Shop Around for Better Rates: Start by comparing rates offered by major Canadian banks and lenders. Consider institutions such as:
- Consult a Mortgage Broker: Mortgage brokers can provide access to multiple lenders, helping you identify the most competitive rates available in Ontario.
- Negotiate with Your Current Lender: Your existing lender may match or beat competitor rates to retain your business. Use the offers you receive as leverage.
- Act Before Year-End: This limited window to switch without a stress test may not last long. Acting before the end of the year ensures you lock in a lower rate before potential policy changes in 2024.
Why Rates Matter Right Now
With Canada’s interest rates expected to stabilize or decline in 2024, switching lenders now puts you in a stronger position:
- Lower monthly payments for fixed-rate mortgages.
- Protection against any future rate hikes if you lock in a competitive rate.
- Improved cash flow for budgeting and investment opportunities.
How Much Could You Save?
For example, if you’re renewing a $500,000 mortgage with a 25-year amortization:
- At 5.5% interest: Your monthly payment is approximately $3,042.
- At 4.5% interest: Your monthly payment drops to $2,767.
That’s a savings of $275 per month or $3,300 annually—money that could be invested elsewhere.
Don’t Miss Out: Act Now Before the Window Closes
This stress-test exception is a game-changer for Ontario homeowners. By shopping around for better rates, negotiating with your lender, and acting quickly, you can take full advantage of this rare opportunity to save thousands on your mortgage.
If you’re considering switching lenders, consult with a trusted mortgage professional or visit reputable banks to explore your options.
What are your thoughts on this new opportunity? Do you plan to shop for better rates? Comment below and let us know!
Stay tuned to our blog for more updates on interest rates and real estate trends in the GTA and across Ontario. Bookmark Mikeyat.com for the latest insights.
