As we reported before, the nation’s biggest bank (RBC) has long used a 3-year posted rate to qualify conventional variables and 1- to 4-year fixed terms. With Scotia and CIBC joining in, some think it’s only a matter of time before the other banks follow.
For that matter, some expect big banks to eventually move back to 35-year amortizations (from 30) on low-ratio mortgages. ING Direct and Laurentian Bank have conventional 35-year amortizations now, and that will certainly prove advantageous to them.
Sidebar: It’s important to note that none of these qualification rate changes affect high-ratioinsured mortgages, which are backstopped by the federal government. High-ratio variable and 1- to 4-year fixed mortgages are still qualified at the big banks’ median posted 5-year fixed rate.
Rob McLister, CMT
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