News release

February 18, 2020 - Ottawa, Ontario - Department of Finance Canada

For many Canadians, their home is the most important investment they will make in their lifetime. That is why the Government of Canada has introduced measures to help more Canadians achieve their housing needs while also taking measured actions to contain risks in the housing market. A stable and healthy housing market is part of a strong economy, which is vital to building and supporting a strong middle class.

Today, Minister of Finance, Bill Morneau, announced changes to the benchmark rate used to determine the minimum qualifying rate for insured mortgages, also known as the “stress test.” These changes will come into effect on April 6, 2020. The new benchmark rate will be the weekly median 5-year fixed insured mortgage rate from mortgage insurance applications, plus 2%.

This follows a recent review by federal financial agencies which concluded that the minimum qualifying rate should be more dynamic to better reflect the evolution of market conditions. Overall, the review concluded that mortgage standards are working to ensure that home buyers are able to afford their homes even if interest rates rise, incomes change, or families are faced with unforeseen expenses. This adjustment to the stress test will allow it to be more representative of the mortgage rates offered by lenders and more responsive to market conditions.

The Office of the Superintendent of Financial Institutions (OSFI) also announced today that it is considering the same new benchmark rate to determine the minimum qualifying rate for uninsured mortgages. OSFI is seeking input from interested stakeholders on this proposal before March 17, 2020. 

Quotes

“For many middle class Canadians, their home is the most important investment they will make in their lifetime. Our government has a responsibility to ensure that investment is protected and to support a stable housing market. The government will continue to monitor the housing market and make changes as appropriate. Reviewing the stress test ensures it is responsive to market conditions.”

Bill Morneau, Minister of Finance

Quick facts

  • When a borrower has less than a 20% down payment, lenders are required to obtain government-backed mortgage insurance. The mortgages must comply with the insured mortgage rules set by the Minister of Finance, including the insured minimum qualifying rate. 

  • When the borrower has a down payment of 20%, or more, of the sale price, insurance is not required. The minimum qualifying rate for uninsured mortgages is set by OSFI, the independent banking regulator.

  • To help more Canadians access affordable housing that meets their needs, the Government of Canada launched the National Housing Strategy—a 10-year, $55+ billion plan that will build 125,000 new affordable housing units, repair 300,000 others, and reduce chronic homelessness by 50%.

  • In Budget 2019, the federal government took concrete steps to make homeownership more affordable for first-time buyers by implementing a First-Time Home Buyer Incentive and increasing the Registered Retirement Savings Plan withdrawal limit to $35,000 to buy a home.

Read full post
Categories:   Abbotsford West, Abbotsford Real Estate | Albion, Maple Ridge Real Estate | BC | Burke Mountain, Coquitlam Real Estate | Canyon Springs, Coquitlam Real Estate | Central Abbotsford, Abbotsford Real Estate | Central Coquitlam, Coquitlam Real Estate | Central Meadows, Pitt Meadows Real Estate | Central Pt Coquitlam, Port Coquitlam Real Estate | Chilliwack Mountain, Chilliwack Real Estate | Chilliwack W Young-Well, Chilliwack Real Estate | Citadel PQ, Port Coquitlam Real Estate | Cliff Drive, Tsawwassen Real Estate | Cloverdale BC, Cloverdale Real Estate | Collingwood VE, Vancouver East Real Estate | Coquitlam West, Coquitlam Real Estate | Cottonwood MR, Maple Ridge Real Estate | Cultus Lake South, Cultus Lake & Area Real Estate | Eagle Ridge CQ, Coquitlam Real Estate | East Burnaby, Burnaby East Real Estate | East Central, Maple Ridge Real Estate | Fairview VW, Vancouver West Real Estate | Fleetwood Tynehead, Surrey Real Estate | Glenwood PQ, Port Coquitlam Real Estate | Harrison Hot Springs, Harrison Hot Springs Real Estate | Heritage Mountain, Port Moody Real Estate | Heritage Woods PM, Port Moody Real Estate | Kitsilano, Vancouver West Real Estate | Langley City, Langley Real Estate | Lindell Beach, Cultus Lake Real Estate | Listing | Lower Mary Hill, Port Coquitlam Real Estate | Maillardville, Coquitlam Real Estate | Maple Ridge Real Estate | Mary Hill, Port Coquitlam Real Estate | Mid Meadows, Pitt Meadows Real Estate | Mission BC, Mission Real Estate | Mountain Meadows, Port Moody Real Estate | New Horizons, Coquitlam Real Estate | North Coquitlam, Coquitlam Real Estate | North Maple Ridge, Maple Ridge Real Estate | North Meadows PI, Pitt Meadows Real Estate | North Shore Pt Moody, Port Moody Real Estate | Oxford Heights, Port Coquitlam Real Estate | Port Moody Centre, Port Moody Real Estate | Port Moody Real Estate | Riverwood, Port Coquitlam Real Estate | Sardis East Vedder Rd, Sardis Real Estate | Scott Creek, Coquitlam Real Estate | Silver Valley, Maple Ridge Real Estate | South Meadows, Pitt Meadows Real Estate | Southwest Maple Ridge, Maple Ridge Real Estate | Sperling-Duthie, Burnaby North Real Estate | Sullivan Heights, Burnaby North Real Estate | Upper Eagle Ridge, Coquitlam Real Estate | Vedder S Watson-Promontory, Sardis Real Estate | Walnut Grove, Langley Real Estate | Websters Corners, Maple Ridge Real Estate | WedgeWoods, Whistler Real Estate | Weekly Mortgage Rates | West Central, Maple Ridge Real Estate | Westwood Plateau, Coquitlam Real Estate | Whalley, North Surrey Real Estate | Willoughby Heights, Langley Real Estate | Woodland Acres PQ, Port Coquitlam Real Estate
The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Real Estate Board of Greater Vancouver (REBGV), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the REBGV, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the REBGV, the FVREB or the CADREB.