Is it time to review Canada's mortgage stress test? This economist thinks so
BNN Bloomberg
Amid heightened interest rates and a diminished probability of another series of hikes from the Bank of Canada, one economist says it is time for the federal government to review its mortgage stress test.
“This [high interest rates] will (or should) be an important consideration when Ottawa decides on potential adjustments to the mortgage stress test’s minimum qualifying rate (MQR) on December 15. Whether there will be any changes made to the size of the MQR’s hefty buffer is another matter,” Robert Hogue, an assistant chief economist at Royal Bank of Canada, said in a note to investors on Dec. 5.
The Office of the Superintendent of Financial Institutions (OSFI) is scheduled to release an update to its minimum qualifying rate (MQR) for the stress test next week.
Despite the falling probability of another series of rate hikes from the central bank, Hogue said that policymakers will likely look to “maintain a high degree of stringency” to keep systemic risks to a minimum amid economic uncertainty.
