Canada keeps mortgage stress test benchmark unchanged despite hot housing market – Reuters

December 17, 2021 by No Comments

TORONTO, Dec 17 (Reuters) – Canada’s financial regulator left the benchmark for its mortgage stress test unchanged on Friday, despite growing concerns about a red-hot housing market that shows no sign of cooling.

The Office of the Superintendent of Financial Institutions (OSFI) said the minimum qualifying rate (MQR) for uninsured mortgage borrowers will stay at 5.25%, keeping the benchmark the greater of this rate, or a range of rates submitted by lenders plus 200 basis points, according to a statement on the regulator’s website.

The S&P/TSX banking index (.GSPTXBA) rose 0.3% on the Toronto Stock Exchange, compared with a 0.15% retreat in the broader benchmark (.GSPTSE).

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Since June 1, whenOSFI began enforcing the current minimum rate in response to rising vulnerabilities including rising home prices and household indebtedness, the national average sale price has increased 3.5%. read more

Canadian house prices are up nearly 20% from a year earlier, setting a record in November, exacerbating affordability concerns and stoking fears of a bubble.

Ben Gully, assistant superintendent of OSFI’s regulation sector, acknowledged that rising household indebtedness resulting from surging home prices …….

Source: https://www.reuters.com/markets/rates-bonds/canada-leaves-mortgage-stress-test-benchmark-unchanged-despite-record-high-home-2021-12-17/

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