Canada’s apex bank to review mortgage ‘stress test’ rules

Mortgage brokers believe that, with the housing market cooling, it’s time for Canada’s banking regulator to relax its mortgage qualifying rate or “stress test.” The Office of the Superintendent of Financial Institutions hinted this week that it might make “adjustments” to its qualifying rate before the end of the year in a statement.

The qualifying rate is reviewed and communicated to the public each December, ahead of the busy spring housing season the following year.

However, the office, which oversees hundreds of financial institutions and over 1,000 pension plans in Canada, said this week that an announcement might be made before the end of the year.

“Throughout the rest of the year, OSFI continually monitors the Canadian housing market and mortgage practices, and may make adjustments at any point if necessary for the health of the Canadian lending industry,” the regulator said in a statement Thursday.

Given rising interest rates this year and a resultant drop in home sales, several in the housing business believe the office should and will take action.