Pre-Approved Rates Null After April 19

April 19 Deadline
Magnifying glass

If you have been pre-approved for a mortgage at a specified rate, but as of April 19 have still not signed the purchase agreement, be forewarned that new qualifying rate rules will apply.

According to the Canada Mortgage and Housing Corporation (CMHC), a mortgage pre-approval does not represent a binding agreement for the lender to provide the said funds. Therefore, unless you sign your purchase agreement prior to the April 19 cutoff date, the rate you qualify for will be subject to the new rules.

If you are applying for a conventional mortgage, allocating 20 per cent or greater of the property value to a down payment, the new rules will not affect your rate, unless you are seeking a product with a lender that plans to implement the new rules even on loan-to-value (LTV) ratios of 80 per cent or less.

If you are applying for a high-ratio loan, or providing a minimal down payment, the new rules could mean that you will qualify for less financing than you have been quoted previous to April 19, or that you will only qualify for a five-year, fixed-rate term.

Before April 19, speak with a mortgage broker and deduce the best strategy for your mortgage qualification and home purchase.

To learn more about the new qualifying rate (or benchmark rate) rules, then go to our article on the subject.

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