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Housing-Bubble Fear Spurs Canada to Weigh Tighter Mortgage Rules

  • Soaring market brings potential for ‘increased financial risk’
  • Housing prices up 17% in a year; suburban markets are on fire
The Housing Boom That Never Ends Already Wiped Out All Short-Sellers
Photographer: Cole Burston/Bloomberg
Updated on

Canada’s bank regulator is proposing tighter mortgage qualification rules to make it more difficult for home buyers to secure financing, a move aimed at cooling the nation’s booming real-estate market.

The Office of the Superintendent of Financial Institutions said it will setup a new benchmark interest rate used to determine whether people can qualify for uninsured mortgages. Home buyers will have to show they can afford a minimum rate of 5.25%. The current threshold, based on posted rates of Canada’s six largest lenders, is 4.79%.