Mortgage Made Easy
04-09-2021, 07:14 AM
The Office of the Superintendent of Financial Institutions (OSFI) unveiled its proposed changes on Thursday, which would require borrowers applying for uninsured mortgages—typically those with more than a 20% down payment—to qualify at their mortgage contract rate plus two percentage points or 5.25%, whichever is higher.
(Read More @ Bloomberg) - Housing-Bubble Fear Spurs Canada to Weigh Tighter Mortgage Rules (https://www.bloombergquint.com/onweb/canada-bank-regulator-eyes-tighter-mortgage-qualification-rules)
The stress test currently has a minimum qualifying rate of 4.79%, nearly 50 basis points lower.
The impact to the changes will reduce purchase power for uninsured borrowers by between 4% and 4.5%. “The maximum amount that can be borrowed under the new rule would decrease by 4.5% (from $442K to $422K for a median-income household)".
There’s no word yet if changes to the insured mortgage stress test (less than 20% down payment) will be forthcoming as well. But the Minister of Finance, who oversees the stress test says he will continue to monitor housing market conditions across the country.
The public is invited to provide feedback to OSFI via B.20@osfi-bsif.gc.ca, which will be accepted up to May 7, 2021. OSFI will then communicate some of that feedback and any final amendments to the qualifying rate by May 24, 2021, prior to the new stress test taking effect on June 1, 2021.
If you have questions that pertain to your situation, feel free to PM, email or call.
(Read More @ Bloomberg) - Housing-Bubble Fear Spurs Canada to Weigh Tighter Mortgage Rules (https://www.bloombergquint.com/onweb/canada-bank-regulator-eyes-tighter-mortgage-qualification-rules)
The stress test currently has a minimum qualifying rate of 4.79%, nearly 50 basis points lower.
The impact to the changes will reduce purchase power for uninsured borrowers by between 4% and 4.5%. “The maximum amount that can be borrowed under the new rule would decrease by 4.5% (from $442K to $422K for a median-income household)".
There’s no word yet if changes to the insured mortgage stress test (less than 20% down payment) will be forthcoming as well. But the Minister of Finance, who oversees the stress test says he will continue to monitor housing market conditions across the country.
The public is invited to provide feedback to OSFI via B.20@osfi-bsif.gc.ca, which will be accepted up to May 7, 2021. OSFI will then communicate some of that feedback and any final amendments to the qualifying rate by May 24, 2021, prior to the new stress test taking effect on June 1, 2021.
If you have questions that pertain to your situation, feel free to PM, email or call.