Failed the mortgage stress test? Alternative lenders await at a price

On Monday, stricter new federal rules about who can qualify for an insured mortgage took effect across the country. Now, all new mortgage applicants have to pass a ‘stress test,’ which tries to predict whether they can keep up with mortgage payments, at their current salary levels, if interest rates were to rise.

Low interest rates have fuelled red-hot real estate markets in south-central Ontario and, especially, Vancouver. As real estate values have skyrocketed in both places, uneasiness has grown about affordability and whether real estate has become a bubble economy.

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