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Insured and Uninsured Mortgage Stress Test Changes Confirmed for June 1

Steve Huebl
Publication date:
May 21, 2021
Article Summary: 

The Office of the Superintendent of Financial Institutions (OSFI) and the Department of Finance have confirmed that both insured and uninsured mortgage borrowers will be subject to a stricter stress test when qualifying for their mortgage. The higher minimum stress test is expected to cut maximum buying power by between 4% and 4.5%, and is expected to reduce purchasing power for uninsured borrowers by between 4% and 4.5%. This is both bad news and good news for first-time buyers, as it reduces buying power and reduces price pressure. Mortgage Professionals Canada expressed disappointment in the minister's decision to apply a stricter stress test to insured mortgages. The Bank of Canada voiced concern about unsustainable house prices and growing household debt, and unveiled a "House Price Exuberance Indicator" to measure nine major markets across Canada for expectations that local home prices will continue to rise. The Bank also released a Financial System Review, which found the share of highly indebted households taking out mortgages is now up to 22%.


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Source Citation: 
Steve Huebl
Insured and Uninsured Mortgage Stress Test Changes Confirmed for June 1
May 21, 2021
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