We know rates are going to rise, but we don’t know when. Stress-testing for the future rate hike is an exercise that financial experts and mortgage brokers recommend highly, reports Yahoo Finance Canada.
 
A simple way for people to do this is to work out what they think their maximum monthly payment could be and then work backward to see what that means in terms of an interest rate. Once a homeowner knows what their maximum interest rate is, to match their maximum mortgage payment, then they can gauge how close they are to that rate right now and make a decision what type of mortgage is best for their budget.


Canada's new lending rules have already implemented a stress test in way, given that those who wish to take a variable rate mortgage or a fixed mortgage with a term less than five years are required to qualify with an artificially higher interest rate, currently 4.99 per cent.
 
The ideal time to stress-test a mortgage is before you buy, but that doesn’t mean you can’t do it after you’ve purchased a home.

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