Photographer: Brian Babb
“Canada’s top banking regulator has published the final version of its new mortgage rules, which include a requirement to “stress test” borrowers with uninsured loans to ensure they could withstand higher interest rates,” wrote Pete Evans for CBC News on October 17, 2017.
Evans continued, “The Office of the Superintendent of Financial Institutions (OSFI) released new guidelines for the mortgage industry on Tuesday. The regulator floated a similar version of these rules earlier this summer in draft form, but Tuesday’s release makes them official as of Jan. 1.
Among the major new rules is a requirement to stress test uninsured borrowers. Previously, only insured borrowers had to undergo such a test.
By law, borrowers with a down payment of under 20 per cent for a home must purchase mortgage insurance. Borrowers pay an insurance premium, but the beneficiary is actually the lender, because the insurance protects the loan giver in the event the borrower defaults on the loan.”
Read the full article here.
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