Changes to the Qualifying Rates for Mortgages

The Office of the Superintendent of Financial Institutions (OSFI) announced it will move forward with a proposed new qualifying rate for uninsured mortgages, reinforcing the mortgage underwriting principles outlined in Guideline B-20. As of June 1, 2021, the qualifying rate for all uninsured mortgages should be the greater of the mortgage contractual rate plus 2%, or 5.25%. The change raises the minimum qualifying rate by 46 basis points from the current 4.79%.

The federal government will align with OSFI by establishing a new minimum qualifying rate at the same level for insured mortgages.

TRREB, along with CREA, participated in the consultation and advised the government to consider a regionalized approach. To review the TRREB submission to OSFI, please click here. The government’s response can be found in the annex from OSFI.

Both OSFI and the federal government have indicated they will review the impact of the changes before the end of the year and adjust as necessary. TRREB will monitor impacts in the resale housing market and continue to advocate in partnership with CREA on behalf of Members and their clients.
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TRREB welcomes the recent acknowledgement by the federal government that all levels of government need to address the growing imbalance between supply and demand. TRREB has advocated for many years for a supply-focused approach in order to bring balance to the market and increase housing affordability. We are encouraged that the federal government has taken note.