Mortgage gap created by the posted rate leaves homebuyers with a decision to make

Call it the gap between what you have to pay and what you can afford to pay — it’s going to be considerable when you qualify for your next mortgage. Now the question is what should you do with that money?

Ottawa tightened mortgage rules in October and the one requirement that has disrupted the lending world is the stipulation that consumers qualify based on the Bank of Canada posted rate for a five-year fixed-rate mortgage.

That rate — it’s based on the most common posted rate of the big six banks for a five-year fixed rate mortgage — has been stuck at 4.64 per cent since the government announced the new measures in October 2016. Qualifying with that rate is a heavy burden and creating a huge gap when it comes time to deciding how much you will actually pay, considering consumers can lock in a rate for as low as 2.28 per cent for five years, according to ratespy.com.