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Federal Gov't Changing Mortgage Rule Jan/18

Blog by Diane Cardoso | October 20th, 2017

Canada's banking regulator will move ahead with controversial new mortgage stress-testing rules in an effort to curb risky lending practices at banks, but critics say the changes will drive more borrowers to unregulated alternative lenders and add risk to the financial system more broadly.

The Office of the Superintendent of Financial Institutions (OSFI) unveiled a final draft of new mortgage qualification rules Tuesday, tweaking its earlier proposal to ensure home buyers will not have an unintended incentive to sign up for shorter-term mortgages.

The new rules met with criticism that OSFI is offloading risk to the unregulated lending sector, which doesn't come under OSFI control – an outcome that OSFI superintendent Jeremy Rudin acknowledged Tuesday but said he cannot prevent from occurring.

If you have a mortgage renewal coming up, you may want to consider updating before January 1, 2018.