Canadian banking regulator insists it will not budge over mortgage rules
“Let me reassure those of you who oppose a loosening of underwriting standards that OSFI will not do that.”
The stress test continues to play a central role in providing “greater margins of safety” during this prolonged period of volatility, the official said.
“We tightened our expectations so that lenders will have to ensure their residential, uninsured mortgage clients with loan-to-value amounts above 65% do not repeatedly borrow against their principal or the price appreciation on their homes, which would sustain their indebtedness,” Routledge said, while also adding that “we are constantly evaluating the [stress test] to measure its efficacy in sustaining sound residential mortgage underwriting.”
Earlier this week, the Toronto Regional Real Estate Board called on the federal government to re-examine the stress test in light of mounting inflationary pressures.