Bank regulator proposes higher mortgage stress test level, making it harder to qualify for home loan

Author: Andre Ouimet - Mortgage Agent | | Categories: Mortgage Agent , Residential Mortgages

Canada's top banking regulator is proposing to raise the mortgage stress test level to 5.25 per cent or two percentage points above the market rate, whichever is higher.

That's a hike from 4.79 per cent, which is the current average posted rate at Canada's biggest lenders.

Thursday's change by the Office of the Superintendent of Financial Institutions (OSFI) means borrowers will need to prove that their finances can pay for the loan at that higher rate, regardless of what a lender is willing to lend them. This would make it harder to qualify for a home loan, shrinking the pool of qualified borrowers and ultimately bringing down some of the upward pressure on house prices in the country.

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Original Article Source Credits:   CBC News ,

Article Written By:  Pete Evans 

Original Article Posted on:   Apr 08, 2021 

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