7 February 2018

The new rules should reduce the risky lending amid growing household debt level and rising real estate prices in certain Canadian markets. Now, if you want to get a mortgage from a federally regulated lender, you need to prove your ability to service the loan by qualifying at the greater of the contractual mortgage rate plus 2% or the five-year central bank’s rate (today it’s 5.14%).  As you now, earlier the same stress test was already applied to insured mortgage holders.

According to Superintendent Jeremy Rudin, OSFI knows there could be certain unplanned consequences, for instance, borrowers switching to more risky lenders.

“But we can’t control that area,” – he said in October. “We focus on the safety and soundness of the federally regulated institutions… It’s definitely not what we want to see, but it’s out of our authority.”

At the same time you should not be afraid of using alternative financing which could be a great short term solution to help you achieve your home ownership dream or take some equity out of your existing property.  Every day we are helping self-employed borrowers or clients with not standard circumstances who have difficulties to confirm their income by big banks guidelines.