OSFI seeks comments on proposed new benchmark rate for qualifying uninsured mortgages

Today the Office of the Superintendent of Financial Institutions (OSFI) announced that it is considering a new benchmark rate for determining the minimum qualifying rate for uninsured mortgages.

OSFI is considering replacing the current benchmark rate with the weekly median five-year fixed insured mortgage rate from mortgage insurance applications, plus a two percent buffer. This rate is also the new benchmark rate for insured mortgages, as announced today by the Minister of Finance, following consultations with OSFI and other federal financial agencies.

OSFI is seeking input from interested stakeholders on this proposal by email to b.20@osfi-bsif.gc.ca before March 17. OSFI will communicate final amendments to the benchmark rate for uninsured mortgages by April 1, with changes effective on April 6.

“Sound mortgage underwriting and B-20 contribute to financial stability throughout the economic cycle. Continually reviewing our prudential measures is part of an effective regulatory framework. This proposal aims to address the limitations of the current benchmark rate while preserving the integrity of the overall qualifying rate.” — Ben Gully, Assistant Superintendent, Regulation.

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