The new mortgage rules of Canada have led borrowers deep into the system of financial intermediaries. They changes have been made to bring certainty in the market and to strengthen the backbone of finance in the country. The new rules require the money lenders to check the knack of borrower to pay back the loan amount with the help of stress test which is subjected to those who are unable to make a down payment of 20% of the total loan amount.
In finance, a loan is a debt provided by one entity (organization or individual) to another entity at an interest rate, and evidenced by a note which specifies, among other things, the principal amount, interest rate, and date of repayment. A loan entails the reallocation of the subject asset(s) for a period of time, between the lender and the borrower.
In a loan, the borrower initially receives or borrows an amount of money, called the principal, from the lender, and is obligated to pay back or repay an equal amount of money to the lender at a later time.