OSFI Keeps the Stress Test as-is for uninsured mortgages
The government arm that is responsible for the mandatory stress test or ‘mortgage qualifying rate’ has decided earlier today to maintain the stress test at its current level as it has a ‘sufficient cushion’ for both borrowers and banks ‘baked in’.
Today’s rate was bumped up earlier this year to a current rate of 5.25% by the Office of the Superintendent of Financial Institutions. That means that in order to qualify for a home loan borrowers will continue to need to demonstrate their ability to pay the greater of 5.25 per cent interest, or their mortgage contract rate plus two percentage points.
The announcement though did include a warning by OSFI officials that they will continue to monitor factors including house prices and the wider economy to determine if changes are required in the coming months
That’s a little bit of good news for anyone looking to borrow money as this does not erode your maximum borrowing power. Stay tuned for further announcements in the new year
