Canadian Financial Regulators Confirm New Qualifying Rates for Uninsured Borrowers Effective June 1st

On Thursday (5-20-21), Canadian financial regulators confirmed a new benchmark qualifying rate for uninsured borrowers would become effective on June 1, 2021. This occurred after the central bank earlier issued it strongest comments yet on the country’s red-hot housing market. Consultations with lenders over the move were launched in April. According to a statement on its website, the Office of the Superintendent of Financial Institutions (OSFI) stated the minimum qualifying rate for uninsured mortgages will be the greater of the mortgage contract rate plus 2%, or 5.25%. OSFI’s Assistant Superintendent for Regulation said in a statement that the new rate “will help support financial resilience should economic circumstances change.”