When you are looking for a variable rate mortgage or a fixed mortgage with a term less than 5 years, you will likely need to qualify at a rate higher than the actual rate you are applying for. This helps the lender ensure that if rates go up, you will still be able to afford your mortgage payments. All variable and 1 to 5 year fixed mortgages with a down payment of less than 20% will be qualified using the Bank of Canada posted 5-year fixed rate.
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