OSFI releases final B20 guidelines

THINK OUTSIDE THE BOX: Big news for 2018!!  A new stress test being introduced by the Government means ALL Buyers requiring a mortgage now need to qualify at a higher (stress test) rate.  Effective January 1st, all Applicants will qualify for approximately 20% less of a mortgage amount than they do today.  If you know someone who is Business-For-Self, or looking to buy that larger home with a mortgage helper rental suite, perhaps they should consider purchasing ASAP because they’re buying power will be a lot less as of January 1st.


Canada’s banking regulator has published the final changes to its guidelines for residential mortgage underwriting, including a financial stress test for buyers who don’t need mortgage insurance.

The Office of the Superintendent of Financial Institutions said Tuesday the changes will come into force by Jan. 1, 2018.

Even homebuyers who don’t require mortgage insurance because they have a down payment of 20 per cent or more will have to prove they can continue to make payments if interest rates rise.

Other changes include restrictions on co-lending, or bundled mortgages, aimed at ensuring financial institutions do not circumvent rules that limit how much they can lend.

The final guidelines are generally similar to what OSFI had proposed in July, when the regulator put out a draft for public consultation.
The proposed changes, however, have been criticized for including potentially increasing costs and limiting access to mortgages for some home buyers.

“These revisions to Guideline B-20 reinforce a strong and prudent regulatory regime for residential mortgage underwriting in Canada,” said Superintendent Jeremy Rudin in a statement on Tuesday.

Armina Ligaya          The Canadian Press           17 Oct 2017

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