**OSFI new stress test announcement** (spoiler: it isn't as scary as everyone is making it sound)

Office of the Superintendent of Financial Institutions

(OSFI) announced today they are re-opening the discussions around the qualification rates for the stress test in Canada.

Right now the qualification rate for best interest rates used for the stress test is 4.79%. Consultation will continue to take place over the next few weeks ending on May 7, 2021 with an announcement to occur May 24, 2021. The discussion suggests that they are considering an increase to 5.25% as of June 1, 2021 which would impact the maximum mortgage some clients would qualify for.


Who are they saying this would this affect?


  • Anyone who wants to refinance

  • Anyone who has over 20% down and is wanting to purchase at the very maximum of their budget

Who are they saying would NOT be affected?


  • Currently they are suggesting that this would not impact anyone purchasing a home under $1M purchase price with less than 20% down

What is important to know:


  • Previously the qualification rate was at 5.19% in 2020 which is not that far off what they are suggesting to increase to

  • When I look at the average client this affects in my book of business the average impact is around $30k less in mortgage approval. While this is a decrease when we look at the actual numbers it is not as significant as they make it sound in the news.

If you or anyone you know are thinking of purchasing, refinancing or have a renewal date coming up we should talk about the proposed changes, how they may affect your options and determine if we need to have something in place before the June 1, 2021 proposed change date.

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