Canada’s banking regulator has proposed changes that would strengthen the stress test applied to uninsured mortgages…
Tag: Stress Test
In light of the past six months of COVID-19-triggered uncertainty, home sales in Canada have been shockingly brisk as a combination of FOMO and low-interest rates…
Thanks to a reduction in some Big-Bank posted rates in recent days, Canada’s mortgage stress test rate will fall as early as next week.
The directive from Prime Minister Justin Trudeau to Finance Minister Bill Morneau on Friday was short and sweet: “Review and consider recommendations from financial agencies related to making the borrower stress test more dynamic.” What will actually come from this review and the resulting tweaks (if any) to the mortgage stress test is unclear. BACKGROUNDER: There are two mortgage stress tests, one on insured mortgages (less than 20% down payment) and another on uninsured mortgages. The latter, implemented on January […]
In a press conference following yesterday’s interest rate announcement, Bank of Canada Governor Stephen S. Poloz and Senior Deputy Governor Carolyn A. Wilkins discussed the reasoning behind the rate decision as well as the updated monetary policy report, as well as the effect that a so-called “insurance cut” would have.
There was a 3.5% rise in Canadian home sales in July compared to June and unadjusted activity was up 12.6% year-over-year.
Canadian mortgage borrowers have been waiting years for this moment.
This week the Bank of Canada’s qualifying rate declined, something that hasn’t happened since 2016.
The rate fell to 5.19 percent from 5.34 percent the previous week.
The benchmark posted 5-year fixed rate, which is used for stress-testing Canadian mortgages, fell yesterday in its first move since May 2018.
The stress tests most mortgage applicants in Canada face are defective — but rather than scrapping them, policymakers should make changes.
At long last the Canadian housing market appears to be shaking off the effects of the mortgage stress test.