OSFI holds uninsured mortgage stress test rate steady

By The Canadian Press | December 17, 2021 | Last updated on December 17, 2021
1 min read
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The federal banking regulator is keeping the interest rate used in a key stress test for uninsured mortgages on hold.

The Office of the Superintendent of Financial Institutions says the minimum qualifying rate for uninsured mortgages will remain the greater of the mortgage contract rate plus two percentage points or 5.25%.

Low interest rates have helped Canadians borrow money to buy homes, but also saddled them with large mortgages as home prices have soared.

The regulator says in an environment characterized by increased household debt and low interest rates, it is essential that lenders test borrowers to ensure that they can pay their debts under more adverse conditions.

OSFI changed the stress test rate earlier this year and committed to review and communicate the rate at least every December.

Uninsured mortgages are residential mortgages with a down payment of at least 20%. The Department of Finance sets the minimum qualifying rate for insured mortgages.

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