New Mortgage Rules – How does these effect Canadian’s

The Office of the Superintendent of Financial Institutions (OSFI) issued a revision to Guideline B-20 on October 17, 2017. The changes will go into effect on January 1, 2018, and will require conventional mortgages (more than 20% down payment) to qualify at the GREATER OF the Bank of Canada’s (BoC) five-year benchmark rate (currently 4.99%) OR the customer's mortgage interest rate plus 2%. Up until now, only high ratio mortgages (less than 20% down payment) have to qualify at the BoC rate on a 25 Year Term. This rule will now apply to all mortgages.   OSFI is implementing these changes for all federally regulated financial institutions. As a result, some customers looking to purchase a home or refinance may experience a reduction in the total principal amount they are qualified to borrow.   How…