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Clarification on Minimum Qualifying Rate for Adjustable rate Mortgages

General Angela Calla 21 Jul

Given the recent increase in the Prime Rate, we want to provide clarification regarding the application of the minimum qualifying rate on Adjustable Rate Mortgages (“ARM”), insured and conventional.  All ARM loans must now be qualified using a rate of contract plus 2%, which is now greater than the 5.25% Qualifying Rate.

Existing First National Commitments for Adjustable Rate Mortgages (“ARM”) do not have to be requalified using a rate of contract plus 2%, unless there is a material change to the deal.

Existing preapprovals for Adjustable Rate Mortgages (“ARM”) must be requalified at the current qualifying rate when the deal is converted to a live deal, and a commitment is issued.

Example: Borrower has a preapproval committed which was qualified using 5.25% which was greater than the contract plus 2% when issued. The borrower has now found a property and the transaction is scheduled to close within the rate hold period. Due to the Prime Rate change, the borrower will now be qualifying off their adjusted contract rate plus 2% using the new Prime Rate of 4.70%

All adjustable rate submissions will be qualified using the new prime rate of 4.70%, effective immediately.

(This article is from the First National Financial LP. newsletter)

Angela Calla is an 18-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code, Angela educates prospective home buyers by providing vital information on mortgages. 

In August of 2020, at the young age of 37, Angela surpassed $1 Billion dollars in funded personal mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at or at 604-802-3983.

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