Bank Watchdog Keeps Rule That’s Slowing Canada’s Mortgage Market
- Regulator holds mortgage qualifying rate at existing level
- Canada’s housing market faces decades-low affordability
Houses and condos in Toronto, Ontario.
Photographer: Cole Burston/BloombergThis article is for subscribers only.
Canada’s banking regulator maintained the qualifying test it imposes on mortgage borrowers, keeping pressure on the nation’s prospective home buyers.
Borrowers who are applying for uninsured mortgages must go through a so-called “stress test”, officially known as the minimum qualifying rate, to ensure they can handle a future increase in rates. The MQR will remain the greater of 5.25% or the bank’s contract rate plus 2 percentage points, the Office of the Superintendent of Financial Institutions said in a statement Tuesday.