4% INTEREST RATE

Let’s explore this offer’s details and see if it’s a good fit for you!

With a 4% interest rate, Sterling Homes Calgary Exclusive offer can help you achieve your dream of becoming a homeowner. There are advantages to this offer, but you might be wondering: Is this the right option for me?

Overview: Benefits

  • Pass a lesser stress test to qualify for a bigger purchase amount. This enables candidates who couldn’t qualify with their existing bank to do so (i.e. Qualify for $100k more with the same income)
  • To meet a given price point for affordability, the applicant can qualify with a lower household income (i.e. They can qualify for the same house with a $20k lower income)
  • Lower payments for the first six months offer advantages for savings on up-front costs (ie. Save $4000 in first six months with lower interest rate payments)

Who would benefit from this offer?

If you fit into one of these groups, this might be the ideal time for you to realize your dream of becoming a homeowner:

  • Those who can’t qualify because their income isn’t high enough
  • Those who wish to receive approval for a larger sum/price
  • Those looking to save money up front

Comparing Payment Disparities & Qualifying Rates:

As mentioned above, the monthly savings as well as the payments based on a 4% mortgage rate as opposed to a 5.15% mortgage rate. As you can see, there is a sizeable monthly savings; however, it’s crucial to remember that the 4% interest rate is only for a 6-month term. Continue reading to see the fine print.

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Stress Testing: What is it?

The stress test is a legal obligation that went into effect in 2016 to make sure that borrowers can tolerate a rise in interest rates. At the time, it only applied to insured mortgages (less than 20% down). As of 2021, it applies to all mortgages and was initiated to ensure that Canadians can afford their payments if rates rise.

What determines the minimum qualifying rate?

The Bank of Canada’s benchmark rate of 5.25% or the rate provided by your lender plus 2%, whichever is higher, serves as the foundation for the minimum qualifying rate. For instance, if your lender offers a rate of 2.50%, your stress test will require you to use the 5.25% qualifying rate. You must use a rate of 6.50% if your lender offers you a rate of 4.50%. In addition, after the first six months, customers will renew for a five year rate. Renewals are at the current lender rate and not subject to the stress test.

Let’s go over how your monthly payments, interest rate, and necessary income change if you are approved at a 3.75% interest rate:

Scenario 1: You’re unable to qualify due to insufficient income.

As you can see, qualifying at 4% interest reduces both your necessary income and monthly payment.

Scenario 2: You want to be qualified for a higher price point.

Let’s say your $100,000 income only qualified you for $400,000 in aid. You can now qualify for a $480,000 mortgage with the same salary provided you qualify for a 4% interest rate.

Let’s examine the small print in more detail:

  1. Fees
    • A $1,500 fee is charged on mortgages under $300,000
      On mortgages between $300,000 and $499,999, there is a $2,000 fee.
      Mortgages between $500,000 and $999,999 are subject to a $2,500 charge.
  1. Duration of 6 months
    • With a 6-month period, the interest rate is 4%. The objective is to assist borrowers in passing the stress test with a lower rate of approval. The borrower needs to renew after the initial six months.
  2. Renewal of Mortgages and Penalties:
    • For the upcoming five-year period, the borrower must renew with the lender at current lender rate. If you end the contract before 6 months, there is a 1% penalty.
  3. Purchase needs to be completed in 120 days:
    • Possession must be completed within 120 days from mortgage application and is intended for quick possession homes.
  4. Not obtainable for mortgage borrowing or rental purchases:
    • For investment homes or mortgage draws, this offer is not valid.

Other conditions can apply and other customer qualification parameters apply. Without prior notice, the promotion could terminate at any time. For further information, see a sales representative.

How do I get get started?

This deal is advantageous for consumers wishing to purchase a home because it enables them to qualify for a bigger amount with a lower stress test, is affordable, and requires no down payment. Don’t pass up this fantastic chance. If you’re ready to start your road toward homeownership and learn more about this amazing 4% offer, get in touch with Sterling Homes Calgary Sales representative in any of our communities.

How do I get get started?

This deal is advantageous for consumers wishing to purchase a home because it enables them to qualify for a bigger amount with a lower stress test, is affordable, and requires no down payment. Don’t pass up this fantastic chance. If you’re ready to start your road toward homeownership and learn more about this amazing 3.25% offer, get in touch with Sterling Homes Calgary Sales representative in any of our communities.