Would TD Bank's move ultimately ease the stress test?

by Gerv Tacadena on 12 Feb 2020

TD Bank's recent decision to cut its five-year posted rate might set a very "action-packed" scene for Canada's housing market this spring, an expert said.

In a TV interview with BNN Bloomberg, RateSpy.com founder Robert McLister said TD Bank's move could trigger other big banks to slash their posted rates, a scenario that could result in the easing of the stress test.

If the other big banks follow suit, the Bank of Canada would likely be compelled to lower the benchmark rate to below 5% for the first time since the stress test rules were adopted.

"And that will improve a typical borrower's ability to buy a home by about 2%," McLister said.

Also read: Mortgage growth poised to speed up further

With this added boost in borrowing capacity, more buyers would get the confidence to participate in the housing market, heating up the already competitive space.

"The spring market accounts for a disproportionately large percentage of home sales. It's prime time in the mortgage market and this change by TD, if it's matched in short order, is going to make for a more action-packed spring market," McLister said.

McLister said an increase in demand for housing will fuel house-price growth, particularly in popular markets like Toronto, Vancouver, and Montreal.

Post a Comment

Most Trending News

Unlocking the Potential of Mailchimp for Real Estate Professionals
News

With various tools available, many agents and brokers are opting for Mailchimp, thanks to its user-friendly features and robust capabilities.

Read More
A Realistic Guide to Becoming a Real Estate Agent
News

The allure of financial independence and entrepreneurial freedom draws many to the real estate profession.

Read More
Real Estate Agent Benefits: More Than Just Commissions
News

Unlocking Real Estate Agent Benefits Beyond Commissions. Discover the hidden perks and rewards of this dynamic career.

Read More