That could have some cooling effect on Canada’s housing market – although it’s unlikely to precipitate any kind of crisis, according to a leading industry executive.

Steven Tulman (pictured top), president and broker at the Mississauga, ON-based Clover Mortgage, told Canadian Mortgage Professional that it would likely become more difficult for would-be homebuyers to secure a mortgage because of a probable higher qualifying rate. 

“A rate increase can potentially slow down this incredible growth that we’ve been experiencing across Canada in real estate markets,” he said.

“In theory, it should make it harder for people to qualify for mortgages on homes since the mortgage stress test will likely increase. [However] I don’t see anything catastrophic happening. I don’t feel like the Canadian government will allow that to happen and will step in if needed.”

Rate hikes could see triple-A lenders, such as mainstream banks, become increasingly out of reach for many prospective buyers, Tulman said – a development that may push many borrowers towards the alternative space to service their mortgage needs.