Bank regulator maintains uninsured mortgage stress test rate

TORONTO – Canada’s banking regulator says it has left the stress test rate for uninsured mortgages unchanged.

The Office of the Superintendent of Financial Institutions says the minimum qualifying rate for uninsured residential mortgages will remain the greater of 5.25 per cent, or the mortgage contract rate plus two per cent.

Uninsured mortgages are generally residential mortgages with a down payment of 20 per cent or more.

Superintendent Peter Routledge says holding the minimum rate helps ensure lenders and borrowers manage risk associated with residential mortgages.

He says the stress test has produced a more resilient residential mortgage financing system.

OSFI sets the stress test for uninsured mortgages, while the finance department sets the rate for insured mortgages.

This report by The Canadian Press was first published Dec. 12, 2023.