Mortgage Professionals Canada (MPC) Pushing for Changes

Ever since the stress test was introduced in 2016, MPC has been asking for it to be uncoupled from Bank of Canada (BOC)’s 5-year fixed rate. That’s because, as the Government of Canada’s own website states: “The Bank of Canada 5-Year Benchmark Posted Mortgage Rate is also less representative of average contact rates as it only considers Canada’s six largest banks, and the “posted”, and not “actual” rates offered to borrowers by those banks.”

Paul Taylor, President and CEO of MPC said the association continues to ask for more support for those struggling to pass the stress test. He considers the 2% buffer to be “an onerous test level given the economic realities globally.”

MPC is also asking the government to reintroduce an insurable 30-year amortization for first-time buyers and to increase the income maximum multipliers under the First Time Home Buyers Incentive Plan.

References:

https://www.canadianmortgagetrends.com/2020/02/department-of-finance-announces-new-qualifying-rate-for-insured-stress-test/?fbclid=IwAR2vA_XfW9htt-pe5oQexEFaAbRYYeXPf9zDW7-tWCGpnj8OcLPOXzyUCYA

https://www.canada.ca/en/department-finance/news/2020/02/a-new-benchmark-rate-for-insured-mortgages.html