Big-city home values were out of control. The real estate market needed de-risking. But the solution policy-makers gave us (the B-20 mortgage guideline) was imperfect, very imperfect. What’s About to Happen Effective January 1, 2018, the banking regulator (OSFI) will force the vast majority of low-ratio mortgage applicants to prove they can afford a payment based on a rate that’s...
Canada’s new “B-20” mortgage stress test will be a tectonic shift for the roughly 1 in 6 borrowers it affects, starting January 1. It’s going to force higher-indebted creditworthy borrowers to either: reduce their loan amount, seek help qualifying (e.g., find a bigger down payment or co-signor), defer their homebuying plans, or seek out a non-bank lender, like a credit...
On Tuesday thegovernmentannounced a January 1, 2018, implementation date for its new uninsured mortgage stress test. In that announcement it said something else thatmany glossed over: “Where possible,federally regulated financial institutions are expected to comply with the principles and expectations set out in this guideline as of the date of this letter [October 17, 2017].” OSFItold ustoday, “Banks are expected...
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