Based on the federal stress test rule, requiring borrowers to qualify at 200 basis points higher than the offered rate, individuals in May would have to qualify at 6.49 per cent. Photo by Mike Hensen /Postmedia

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Homes became less affordable across Canada in May driven by rising prices and mortgage interest rates, a new report found. Ratehub.ca published its monthly affordability report in June, showing the income required to qualify for a five-year, fixed-rate mortgage for the average-priced home increased in every major market monitored.

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That includes Calgary where the average home price was $573,000 in May, up $2,400 from the month before. Additionally, the mortgage interest rate increased from 4.47 per cent to 4.49 per cent.

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Based on the federal stress test rule, requiring borrowers to qualify at 200 basis points higher than the offered rate, individuals in May would have to qualify at 6.49 per cent.

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In turn, a Calgary buyer would require an annual income of $124,360 to qualify for a mortgage in May, about $660 more than in April. As well, the monthly mortgage payment would rise $18 to $2,940.

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Calgary ranked in the middle of the pack for affordability among the 13 markets in the study.

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St. John’s, NL, saw the greatest month-over-month increase in income required to qualify for a mortgage where the average home price rose $13,900 to $414,200.

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There, a buyer would require $94,020 in annual income, up $2,800 from April. The monthly mortgage payment would also jump $75 to $2,125.

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Despite the sizable jump, the city is among the most affordable markets in the nation.

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By comparison, Toronto saw its average price rise $2,400 to $946,500 in May, requiring an annual income of $195,720. That’s up $780 from April. The monthly mortgage cost would be $4,856, up $22 from the previous month.

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Only Montreal saw a decrease in housing price in May falling $1,000 from April to $593,400. Yet the increase in interest rate still resulted in a borrower requiring $10 more in annual income ($128,260). The monthly mortgage cost grew just $1 to $3,044.

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