Homebuyers take note: Stress test update coming Friday
BNN Bloomberg
Would-be homebuyers are about to find out what the future holds for the country’s mortgage stress testing requirements.
Would-be homebuyers are about to find out what the future holds for the country’s mortgage stress testing requirements.
The Office of the Superintendent of Financial Institutions (OSFI) will release an update on the minimum qualifying rate for uninsured mortgages on Friday.
As it stands, homebuyers who put down at least 20 per cent up front are required by OSFI to show they’ll be able to service their obligations at their mortgage contract rate plus 200 basis points or 5.25 per cent, whichever is higher.
The same parameters apply for those who put down less than 20 per cent up front, but those rules for insured mortgages are set by the finance department.
The stress test (also known as rule B-20) first came into effect at the start of 2018, and was designed to ensure prudent mortgage underwriting practices at a time when concerns were mounting about household indebtedness and surging home prices in some of the country’s largest housing markets.
