—The Mortgage Report: June 29— Stress Test Fix Overdue: Ottawa was sensible to pause the mortgage stress test changes “given the marketplace uncertainty in March,” says Paul Taylor, President and CEO, Mortgage Professionals Canada (MPC). “However, as we begin to open businesses again, and as economists are generally expecting a housing price downturn, now is the time for OSFI and...

—The Mortgage Report: June 25— OSFI Unplugged: Alberta MP Tom Kmiec has obtained internal emails from OSFI that chronicle the regulator’s efforts to improve the mortgage stress test—in particular its efforts to “fix” the minimum qualifying rate (a.k.a., “MQR” or benchmark rate). The emails show that OSFI’s PR staff wanted the public to know it was making “efforts to get...

A Recovery for the Ages: Against all odds, and despite the biggest unemployment surge in a 3-month span ever, stocks have erased 2020 losses. ICYMI: Private default insurer Genworth Canada saw no need to follow CMHC and tighten its mortgage rules. Canada Guaranty, which has the lowest loss ratio in the mortgage insurance industry, made the same determination, saying, “Given...

The Mortgage Report – June 8 2:35 p.m. Update CMHC on Its Own: If you’re buying with less than 20% down and can’t qualify under CMHC’s stricter insured mortgage rules, you still have options. Effective July 1, CMHC is lowering the maximum debt you can carry, raising its minimum credit score to 680 and banning certain borrowed down payments. But...

The Mortgage Report – May 16 Now to 4.94%: Scotiabank trimmed its posted 5-year fixed rate to 4.94% on Saturday. That puts the mode average of the Big 6 Banks’ 5-year posted rates—and hence the minimum stress test rate—at 4.94%. Of note: This is the lowest the stress test rate has been since October 2017 The all-time low was 4.64%,...

Don’t worry about the nagging side effects from the federal mortgage stress test. You might have heard about them in the media, but based on recent stats shared by the banking regulator, they’re overblown. Nothing to see here… Well, actually, there is more to see. OSFI’s latest assertions raise just as many questions as answers. Here were six points from its January...

Sometimes well-intended rules and regulations cost consumers money. Here’s a perfect example… British Columbia currently has a prohibition on charging fees for mortgage advice unless those fees are deducted from the mortgage amount at closing. The rule was designed to prevent brokers from taking money from unsuspecting consumers and then not providing the financing requested. It’s a rule that’s served a...

Here’s some good news for people who’ve been blocked from qualifying for a mortgage due to the government’s “stress test.” Canada’s banking regulator (OSFI) is taking a second look at the mortgage stress test calculation, which requires borrowers who are not default insured to prove they can afford a monthly payment at the greater of: (A)  Their actual mortgage rate...

For two years, the federal government and regulators have been talking up the virtues of their mortgage stress test. So, imagine the surprise today when the Prime Minister asked the Minister of Finance to: “Review and consider recommendations from financial agencies related to making the borrower stress test more dynamic.” The request came in a mandate letter sent by Trudeau’s...

On Monday night we’ll find out which “housing affordability” plan Canada gets, be it from the Conservatives, Liberals or NDP. All three parties are promising to put homes more within reach, particularly for first-time buyers. Some of their proposals are merely vote bait; some are genuinely productive. After listening to the rhetoric for weeks on end, we’ve formulated three observations. Here are...