NSAR’s PAC team applauds changes coming to the mortgage stress test

Yesterday, Finance Minister Bill Morneau announced changes to the mortgage stress test (B-20). NSAR’s PAC Team, and REALTORS® from across Canada, have been advocating to our federal government and local Members of Parliament for changes to the stress test since its implementation.

In October 2016, Finance Canada introduced a stress test for insured mortgages. In 2017, the Office of the Superintendent of Financial Institutions (OSFI) issued an update, requiring uninsured mortgages to be stress-tested as of January 2018.

The new benchmark rate announced yesterday, used to determine the minimum qualifying rate for insured mortgages, will be the weekly median 5-year fixed insured mortgage rate from mortgage insurance applications, plus 2 per cent. These changes will come into effect on April 6, 2020.

These changes will make the stress test more response to the needs of Canadians, however, your PAC team continues to advocate that the government:

  • Review the mortgage stress test to ensure the realities of local real estate markets are taken into consideration
  • Allow existing mortgage holders to be exempted from the stress test at the time of renewal.