Department of Finance Canada
The Office of the Superintendent of Financial Institutions (OSFI) announced today that it is restarting its consultation on the minimum qualifying rate for uninsured mortgages. The Deputy Prime Minister and Minister of Finance, the Honourable Chrystia Freeland, today issued the following statement:
“For many Canadians, the most important investment they will make in their lifetime is the purchase of their home. Maintaining the health and stability of Canada’s housing market is essential to protecting middle class families and to Canada’s broader economic recovery.
“We will continue to monitor housing market conditions across the country. To inform potential steps the government may take, we will closely examine the results of the consultation announced by the Superintendent of Financial Institutions.
“The federal government remains committed to helping all Canadians find an affordable place to call home.”
- When a borrower has less than a 20 per cent down payment, lenders are required to obtain government-backed mortgage insurance. The mortgages must comply with the insured mortgage rules set by the Minister of Finance, including the minimum qualifying rate. This is currently the greater of the borrower’s contract rate or the Bank of Canada 5-Year Benchmark Posted Mortgage Rate.
- When the borrower has more than a 20 per cent down payment, mortgage insurance is not required. Currently, the minimum qualifying rate applicable to uninsured mortgages, set by OSFI, is the greater of the borrower’s contract rate + 2.00 per cent; or the Bank of Canada 5-Year Benchmark Posted Mortgage Rate.