Ottawa, ON, February 18, 2020 – Earlier today, Minister of Finance Bill Morneau announced changes to the mortgage stress test.
The new benchmark rate used to determine the minimum qualifying rate for insured mortgages, coming into effect on April 6, 2020, will be the weekly median 5-year fixed insured mortgage rate from mortgage insurance applications, plus 2 per cent.
Recently, the gap between the Bank of Canada’s five-year benchmark rate and borrowers’ actual contract rates has been widening, suggesting the benchmark rate has become less responsive to changes in the market.
In October 2016, Finance Canada introduced a stress test for insured mortgages. In 2017, the Office of the Superintendent of Financial Institutions (OSFI) issued