TORONTO – Stricter rules around qualifying for a mortgage could be coming as Canada’s banking regulator seeks feedback on several proposals to limit the number of overstretched borrowers.
The proposals out Thursday from the Office of the Superintendent of Financial Institutions (OSFI) come as part of the first stage of a wide-ranging review of the B-20 mortgage underwriting rules the regulator is conducting this year. Potential additions to the existing stress test include limits around the proportion of mortgages where the loan is more than 4.5 times the borrower’s income, measures that would limit how much debt payments could take up of someone’s monthly household income and a more nuanced approach to the existing stress test that could make affordability tests more stringent for higher-risk products like variable rate mortgages.
