Mortgage Stress Test 2020

Latest News Amritjot Saini 11 Aug

The stress test rate change gives your more purchasing power. Here’s how:

New Mortgage Stress Test rate drop announcements and rumors are roaring. It will be 4.79% soon! Great, but how does it affect an average home buyer’s maximum purchase price? Well, let’s just say your purchase power increases by 1.5% by a rate drop of 0.15% from 4.94 to 4.79.

This means earlier you could only get a mortgage for $493k with a $100k income but now you can afford $500k mortgage. Fantastic, isn’t it!

Stress test rate drop

 

You may be wondering, you hear current mortgage rates are historically low, as low as 1.80% 5 year variable and 2% 5 year fixed. Then,

What is this stress test rate?

To simplify it for you, your mortgage term will be based on the rates your Licenced Mortgage Agent will lock for you. But we all know the rates follow the economy and if the bank rate goes up, so does the current mortgage rates. So what the bank wants to test is let’s say in future the mortgage rates are as high as 4.79% or 4.94% (stress test rate), will the borrowers be able to afford the mortgage. Which is why each mortgage application undergoes stress test.

More and more lenders are jumping in the pool offering to stress test your income at 4.79% so hurry and get your pre-approvals and approvals at the lowest rates!

I want to build relations with you and be part of your home buying process!

Call me on (647) 568-5120 and let’s discuss how we can get your approved at the best rates and mortgage products structured to fit your needs.

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GST/HST New Housing Rebate

Latest News Amritjot Saini 4 Aug

GST/HST New Housing Rebate

If you’re buying a newly built home from a builder, self-building or buying a substantially renovated home, you might be eligible for this rebate. With the purchase price, land transfer taxes and other closing expenses, it might be hard to pay 13% HST. This rebate is available to everyone buying a new home as their principal residence. And for first-time home buyers, their incentives can be coupled with this rebate. However, you’re ineligible for this rebate if you’re buying under a corporation or business partnership.

Surprisingly, now there’s a relief! Just fill out Houses Purchased from a Builder Form 190 or  Owner-Built Houses Form 191 and save yourself thousands of dollars in taxes if you’re buying a newly constructed home.

Here’s how the rebate is calculated.

Firstly you get 36% of the GST (5%) portion you paid for your new home. But the maximum rebate is$6,300 and the maximum fair value can be $350,000. If the purchase price is between $350,001 and $449,999, you’ll still get a partial rebate. Unfortunately, if home’s value is $450,000 or more, there is no GST portion rebate. But you still may claim for rebates on provincial portion of HST up to $24,000.

GST/HST new housing rebate

Here’s a few additional situations you may qualify:

  • If you own the land and are building home.
  • Over 90% of the interior from the previously existed house is removed or replaced
  • If you owned a non-residential property and later rebuilt it into your home.
  • When you make any major additions to the house doubling the living space.

Calculate your GST/HST New Housing Rebate:

Let’s assume your home is valued at $340,000.  The HST you need to pay on top of $340,000 is $44,200. This includes 17,000 GST and $27,200 provincial HST.

Next, let’s calculate the claimable rebate. Firstly, 36% of the GST portion (36% 0f $17,000) $6,120 plus 75% of the provincial HST portion (75% 0f $27,200) $20,400. Adding up to 26,520.

Note: For new homes in Ontario, the maximum rebate amount for the provincial portion of the HST is capped at $24,000 if you paid HST on the land. And if you did not pay HST on the land, the maximum provincial portion of the HST claimable is $16,080.

So finally, the rebate in this case would be $6.120+24,000 = $30,120.

Where to send the rebate form?

Form GST190 needs to be mailed with your direct deposit info to:

Sudbury Tax Centre
1050 Notre Dame Avenue
Sudbury ON  P3A 5C1

Remember

The GST/HST new housing rebate is an not automatic rebate. You need to apply manually and make sure you don’t forget to do this when you file taxes.

In case, the builder of your home has already included the HST in the purchase price, you’ll be able to include the purchase price plus HST amount in your mortgage.

To get a professional advice and approval, contact me(647) 568-5120.

Sourced from Canada.ca.