CBC news ~ September 26th, 2024
The national banking regulator says it will no longer require borrowers with uninsured mortgages to undergo a stress test when switching providers.
The Office of the Superintendent of Financial Institutions says it will end the policy for lenders to apply the minimum qualifying rate to straight switches when uninsured mortgages are renewed at a different institution under the borrower’s current amortization schedule and loan amount.
OSFI says the change comes after feedback from the industry and Canadians “about the imbalance between insured and uninsured mortgagors at the time of mortgage renewal.” It also says data shows the risks the requirement had been intended to address “have not significantly materialized.”
In March, Canada’s Competition Bureau recommended allowing uninsured mortgage borrowers to switch between banks without undergoing a stress test, saying the policy was “not applied evenly.”
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