Date Posted: June 1, 2021
The Office of Superintendent of Financial Institutions (OSFI) have changed the qualifying rules for uninsured mortgages (i.e. residential mortgages with a down payment of 20%).
Effective June 1st, the minimum qualifying rate for a mortgage will be greater of the mortgage contract rate plus 2% or 5.25%. The reason for this is to attempt to make it more difficult for home buyers to qualify for a mortgage and reduce the mortgage amount a household can qualify for by around 5% in an attempt to slow the market. It is also to protect the current loan quality metrics and to ensure they remain strong.
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For more information regarding this, reach out to a Mortgage Broker today!