The Office of the Superintendent of Financial Institutions (OSFI) is proposing a higher qualifying rate for uninsured mortgages/traditional mortgages (down payment at or higher than 20%) in Canada.  Instead the current 4.79%, it is proposing to use the higher of 5.25% or contract rate +2% to qualify for traditional mortgages. It is also suggesting to review and set qualifying rate at least once a year to ensure it aligns with current market conditions.

With the increase qualifying rate, borrowers’ borrowing power will be reduced by around 5%.

For example, a borrower with $100K annual income will qualify for $475K mortgage at 5.25% rate  instead of $500K at current rate 4.79%.

OFSI is seeking feedback on this proposed change by email at B.20@osfi-bsif.gc.ca. 

Final amendments to this qualifying rate will be announced by May 24 and new rule will take place on June 1st, 2021.

Please refer to OSFI's website for more details.