Blog Article

Wednesday, 19 October 2022

By Kim Owen

Shawn Stillman quoted in The Globe and Mail: ‘Think you can move that stellar mortgage to a new home? The pitfalls of porting’

https://www.theglobeandmail.com/investing/personal-finance/household-finances/article-low-mortgage-rate-move-refinance/

“People are paralyzed from fear of falling home prices and that’s keeping many from moving at all,” says Shawn Stillman, a mortgage broker and co-founder of Mortgage Outlet. “Of the people who still want to port their mortgage, most don’t even know these problems exist until they apply and find out they don’t qualify.”

That last point above, regarding your debt-to-income ratio, is what stops the most borrowers from porting their mortgage.

The reason: the government’s mortgage stress test. It requires that today’s borrowers prove they can afford payments based on rates that are 200 basis points above actual rates. Considering the roughly 300-bps runup in fixed rates, that means stress test payments are now based on 7.14 to 7.69 per cent for prime fixed-rate borrowers. (There are 100 basis points in a percentage point.)