New Mortgage Rules Will Disqualify 1 In 10 Would-Be Borrowers, Bank Of Canada Says
New mortgage rules coming into effect in January will disqualify about 10 per cent of prospective homebuyers from buying the home they want, the Bank of Canada says.
Under new rules put into place by Canada’s banking regulator, OSFI, borrowers of traditional mortgages (with 20 per cent or more down) will have to qualify at a rate that is two percentage points higher than the lender’s offered rate. It follows a similar rule put into place last year for borrowers with less than 20 per cent down.
According to an analysis from the Bank of Canada, released as part of its financial system review on Tuesday, the new rule will disqualify 10 per cent of prospective mortgage borrowers, impacting some $15 billion worth of mortgages.