OTTAWA, ON, May 20, 2021 /CNW/ - Today, the Office of the Superintendent of Financial Institutions (OSFI) announced that, effective June 1, the minimum qualifying rate for uninsured mortgages (i.e., residential mortgages with a down payment of 20 percent or more) will be the greater of the mortgage contract rate plus 2 percent or 5.25 percent.
OSFI received over 170 submissions. It is clear that there are a wide range of issues facing homebuyers, including high indebtedness, rapidly rising home prices, housing supply, and competitive bidding. While some of the suggestions fall outside of OSFI's mandate, we have included a summary of the input received and our response for information.
With the finalization of this consultation, OSFI is also launching a new process to review and communicate the qualifying rate at a minimum annually, every December. This timing is set well in advance of the high-volume spring housing market.
Quote
"In a complicated and sometimes volatile housing market, the need for sound mortgage underwriting cannot be underestimated. The rate in place as of June 1, 2021 will help support financial resilience should economic circumstances change, while our commitment to review the qualifying rate at least annually will contribute to continued confidence in the Canadian financial system."
— Ben Gully, Assistant Superintendent, Regulation.
Quick Facts
- As of June 1, 2021, the revised calculation of the minimum qualifying rate for uninsured mortgages will be:
- The greater of the contract rate plus 2% or 5.25%.
- OSFI will review and communicate the qualifying rate at a minimum annually, every December, well in advance of the high-volume housing spring season.
Associated Links
- Consultation closing letter
- Consultation launch letter
- Revised consultation FAQ
- Revised Guideline B-20
- Guideline B-20 Information Sheet – February 2021
About OSFI
The Office of the Superintendent of Financial Institutions (OSFI) is an independent agency of the Government of Canada, established in 1987, to protect depositors, policyholders, financial institution creditors and pension plan members, while allowing financial institutions to compete and take reasonable risks.
SOURCE Office of the Superintendent of Financial Institutions
Media Contact: OSFI - Public Affairs, [email protected], 343-550-9373
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