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\n\nThe Bank of Canada recently announced the decrease of the 5-year benchmark mortgage rate 15 basis points from 5.34% to 5.19 %.\n\nThe decrease in the Bank of Canada’s 5-year benchmark rate is as a result of the big banks decreasing their 5-year posted rates.\n\nThe Bank of Canada’s 5-year benchmark is the rate at which Canadian borrowers are stress tested against when applying for a mortgage. Borrowers with a down payment of less than 20% of their home price must qualify for a mortgage at the Bank of Canada’s posted rate, which is now 5.19%.\n\nBorrowers with a down payment that’s greater than 20% of their home price are stress tested against the higher of either their mortgage rate, plus 2%, or the Bank of Canada’s posted rate.\n\nI weighed-in with James Laird, Co-founder of Ratehub Inc. and President of CanWise Financial for insights on these changes.\n\n’The change in the Bank of Canada 5-year benchmark rate now means that Canadians can qualify for more home today compared to earlier this year and 2018.This decrease alleviates some of the pressure on first-time homebuyers, who are the most financially strained Canadians entering the housing market. Five-year fixed rates are also currently at historic lows, according data from Ratehub.ca, so now is a good time for Canadians to qualify and secure a mortgage rate.’\n\nChanges to Home Affordability \n\nAccording to calculations by Ratehub.ca, a borrower with an annual household income of $100,000 with a 20% down payment and a 5-year fixed mortgage of 2.70% amortized over 25 years would have qualified for a home valued at $589,000 at the previous benchmark rate of 5.34%.\n\nWith the new qualifying rate of 5.19% they can now afford home valued at $597,000\n\nThat’s a difference of $8,000 (1.4% more home)!“}]}],”section_settings”:””},”scripts”:{},”css”:{},”css_page”:””,”template_setting”:{“settings”:{“id”:”settings”}},”template_setting_top”:{},”page_setting”:{“settings”:[“lock-mode-off”]},”post_type_setting”:{“settings”:{“image”:”https://kelleykeehn.com/wp-content/uploads/2019/07/mortgage-rates-pic.jpg|287|511|100002075″,”excerpt”:”The Bank of Canada recently announced the decrease of the 5-year benchmark mortgage rate 15 basis points from 5.34% to 5.19 %.”,”extra_1″:””,”extra_2″:””,”icon”:{“icon”:””,”icon_style”:””,”icon_image”:””}}}}