OSFI Drops Stress Test for Uninsured Mortgage Renewals with New Lenders

Canada's banking regulator eases requirements to boost competition and align rules with insured mortgages.

The Office of the Superintendent of Financial Institutions (OSFI) will no longer require a stress test for borrowers switching lenders for uninsured mortgage renewals.
The change addresses the imbalance between insured and uninsured mortgages, as insured mortgages are already exempt from the stress test during straight switches.
OSFI's decision follows industry feedback and data showing that the risks the stress test aimed to mitigate have not significantly materialized.
The change is intended to enhance competition among lenders and provide borrowers with more options for better mortgage rates.
The new policy will be formally communicated to financial institutions on November 21, 2024, and is part of broader efforts to relax mortgage conditions in Canada.