Mortgage Stress Test: Everything You Need To Know About It

The Office of the Superintendent of Financial Institutions (OSFI) and the Department of Finance have introduced new mortgage stress test rules that will make it more difficult for new and renewing mortgage borrowers to be eligible for their home loan commencing June 1st, 2021. The “stress test” now looks at a higher threshold, and uninsured mortgages with a down payment of at least 20%, and insured mortgages with a down payment of less than 20%, will be required to qualify for 5.25 percent or two percent more than the present rate, whichever is higher. The new stress test will significantly impact first-time homebuyers than others, and homeowners who want to renew their mortgages or switch lenders will have to take a stress test. The new mortgage stress test rules should help calm down the real estate market, which currently experiences unprecedented growth.