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No Change to the Mortgage Stress Test

During their annual review, on December 15, 2023 the Office of the Superintendent of Financial Institutions (OSFI) decided to make no changes to the Minimum Qualifying Rate (MQR) for uninsured mortgages.

Borrowers will continue qualifying at the minimum qualifying rate of 5.25% or the contract rate + 2%, whichever is greater. A news release issued by OSFI on the decision states: “in an environment characterized by rising mortgage rates, sustained high inflation and potential risks to borrower income, it is prudent that lenders continue to test borrowers for adverse conditions”.

Though there are currently no changes to the stress test, in January, OSFI is set out to provide a wider policy review of residential mortgage and underwriting practices, otherwise known as Guideline B-20: Residential Mortgage Underwriting Practices and Procedures