FSRA# 13047 Valko Financial Ltd.

OSFI Proposes Rule Changes to The Stress Test

The Office of the Superintendent of Financial Institutions (OSFI) recently proposed a mortgage rule change to help slow down the overheated housing market. The current rule for mortgage approvals is that you must qualify as if the interest rate is 4.79% OR the contract rate plus 2%, whichever is higher. This is referred to as the Stress Test. The OSFI is proposing that on uninsured mortgages (mortgages with 20% down or more), the stress test rate is increased to 5.25% OR the contract rate plus 2%, whichever is higher. Below is an example of how much income it would take to qualify for a $300,000 mortgage at no stress test, the current stress test, and the proposed changes.

The OSFI is inviting industry stakeholders to submit feedback on the rule changes by May 7th, 2021. OSFI will reveal its final plan for the rule changes on May 24th, 2021, with an enactment date of June 1st, 2021. As a heart-centred team that advocates for fair rules for Canadian homeowners, we want to know how you feel about these rule changes. Please email marketing@valkofinancial.ca with any inquiries about the stress test, so Valko Financial can advise the OSFI and Mortgage Professionals Canada on your behalf.

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