Is Canada’s Mortgage Stress Test Still Relevant?

The article discusses whether changes to Canada's mortgage stress test are overdue in the current economic climate. The stress test was introduced in 2016 to address high household debt and high real estate prices, and it requires both insured and uninsured mortgage borrowers to prove they can meet monthly mortgage payments based on a rate of 5.25% or two percentage points higher than their contract rate—whichever is higher. Currently, home prices are dropping across the country, while interest rates have risen significantly. Some industry experts suggest that the current stress test rules are locking Canadians out of the housing market, while others argue that the stress test remains an important safeguard against future economic downturns.