Tag Archive: stress test


Government is Still Roadblocking First-time Home Buyers: Viewpoint

The Feds would like you to think they want to help first-time buyers. The Liberals’ over-hyped and costly First-time Home Buyer Incentive is a case in point. “The First-time Home Buyer Incentive makes it easier for you to buy a home,” they say. What the government omits to mention is that it’s stood by and allowed the mortgage qualifying rate...

One Stress That CMHC Didn’t (Publicly) Test

Our national housing agency wants to put your mind at ease, sort of. CMHC published its annual stress test this week. Its report claimed CMHC would remain solvent barring a catastrophic scenario entailing: a 48% home price crash, 25% unemployment, and no government intervention (full details here). The report made headlines across the media, as unlikely as some of its...

Stress Test-Free Rental Financing

The government’s “B20” stress test has blocked countless people from buying rental properties as investments. The current 4.79% minimum qualifying rate means would-be buyers have to prove they can afford mortgage payments far above what they’d really pay. Fortunately for some borrowers, there are alternative lenders (e.g., credit unions) that don’t impose the federal stress test. They qualify borrowers on...

More Zigs & Zags to Come

—The Mortgage Report: Weekend Edition— Canada’s rate outlook got a boost this week from two influential developments: Promising vaccine news (20 potential vaccines are in late-stage trials, including Pfizer’s drug that’s reportedly over 90% effective), and The widespread acceptance of Joe Biden’s presidential victory. This much-needed dose of good news led investors to sell government bonds, which is typical when...

OSFI on Reviewing the Stress Test Rate

If you’re hoping the mortgage stress test gets easier—so you can qualify for bank financing—you’ve got more waiting to do. Canada’s banking regulator, OSFI, says it’s not ready to adjust the stress test just yet, despite proposing last February to ease it. OSFI spokesperson Michael Toope tells us: “On March 13, 2020, OSFI suspended all of its consultations and policy...

“Real” Mortgage Carrying Costs Have Never Been Higher

—The Mortgage Report: Sept. 30— The costs you’re expected bear to carry a new mortgage have never been higher—at least based on how lenders assess you as a mortgage applicant. Rocketing home prices and a stubbornly high “stress test rate” have pushed the basic inflation-adjusted cost to carry a home (i.e., average mortgage payment + heat + property taxes) to...

OSFI on When It Will Reassess the New Stress Test

On March 13, 2020, our banking regulator suspended its work on improving Canada’s uninsured mortgage stress test. Its decision was made in response to challenges posed by COVID-19. Prior to that, OSFI had indicated that a new and improved stress test would start as soon as April 6, 2020, pending public consultation and review. At the time, the regulator acknowledged...

How Some People Still Beat the Mortgage Stress Test

Grandfathering Remains in Effect Okay, you really shouldn’t be as happy as these people if you have to do an end-around to pass the stress test, but nonetheless… If you’re switching lenders to get a better deal, the best 5-year mortgage rates are usually available only on insured or insurable mortgages. And that’s a problem if your property value has...

Morneau Out. The Mortgage Impact

Canada’s Finance Minister influences the mortgage market more than any other politician, and now we’re getting a new one. Finance Minister Bill Morneau, who’s held that role since November 4, 2015, is out. He resigned today. To say Morneau was pro-mortgage tightening is an understatement. The 57-year-old Liberal cabinet minister presided over numerous impactful changes to Canada’s mortgage market, including:...

The Mortgage Stress Test Loosens Up

Effective this week, it gets a little easier to buy a house or refinance. On Saturday, BMO and CIBC shaved 15 basis points off their posted 5-year fixed rates. That’s enough to drop the benchmark 5-year posted rate to 4.79%. Given regulators use this benchmark rate to calculate Canada’s minimum mortgage stress test, today’s cuts mean you’ll now need less...