Canada’s financial regulator on Thursday confirmed a new benchmark qualifying rate for uninsured borrowers would come into effect on June 1 after the central bank earlier issued its strongest comments yet on the country’s red-hot housing market.
The Office of the Superintendent of Financial Institutions (OSFI) said the minimum qualifying rate for uninsured mortgages will be the greater of the mortgage contract rate plus 2%, or 5.25%, according to a statement on its web site. Consultations with lenders over the move were launched in April.
The new rate “will help support financial resilience should economic circumstances change,” OSFI’s Assistant Superintendent for Regulation said in the statement.
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