[supafamous]

Originally Posted by westopher

Mom and dad, or the massive mortgages that people can qualify for. I don’t know why people get wound up about the “strict” stress test. The amount you can borrow compared to your income is absurd.

I think the stress test affects folks differently depending on the value of the home - in my case it reduced my borrowing power to the point where I actually laughed at how small my monthly payment was going to be. With interest rates being so low the gap between the test and reality is massive (it'd be about an 80% increase in my payments if it ever hit the stress test number of 5.25%). I do support the strict stress test as a way to slow down the market but I'm in a position where I wanted to borrow a lot more b/c the payments weren't an issue and I'd prefer to divert the funds to other uses. For me it was an annoyance as I can wanted to create more leverage for my money.

I suspect the lower income folks who are making their first foray into the market are the ones who need the test more than I would - spending an entire paycheque (or more) on a mortgage doesn't make a lot of sense.