OSFI sees mortgage stress test ‘imbalance’ at renewal but rules not changing yet

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Mortgage Stress Test News

Competition Bureau,OSFI,Peter Routledge

Canada's banking watchdog acknowledges there's an 'imbalance' for insured and uninsured mortgage holders facing the stress test at renewal, but stands by the practice.

WATCH: Canada's competition watchdog is urging the federal government to drop requirements for some borrowers to pass the mortgage stress test at renewal because it can prevent them from getting the best rate. Nivrita Ganguly has the details in Business Matters for Friday, March 22, 2024 – Mar 22, 2024, is in charge of applying the minimum qualifying rate for uninsured mortgages, colloquially called the mortgage stress test, while the finance minister oversees insured mortgages.

Canadians do not have to re-pass the stress test if they’re re-upping with their existing lender at renewal, regardless of whether they have an insured or uninsured mortgage.If switching lenders at renewal time, however, the minimum qualifying rate only applies on uninsured mortgages.

“I acknowledge that there is an imbalance from the experience of a borrower that doesn’t have mortgage insurance as opposed to one that does. It’s an imbalance that we accept because of the sound underwriting principles behind it,” he said.

 

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