Ottawa changing stress test rate for insured mortgages starting April 6

The government says the change will allow the rate to be more representative of the mortgage rates offered by lenders and more responsive to market conditions.

The new minimum qualifying rate will be the greater of the borrower's contract rate or the weekly median five-year fixed insured mortgage rate from mortgage insurance applications, plus two percentage points. The stress test rate currently is the greater of the borrower's contract rate or the Bank of Canada five-year benchmark posted mortgage rate.

The Office of the Superintendent of Financial Institutions says it is also considering using the same new stress test rate for uninsured mortgages. OSFI has been using a minimum qualifying rate of the greater of the contractual mortgage rate plus two percentage points or the five-year benchmark rate published by the Bank of Canada.

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