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Canada's New Mortgage Regulation

New Mortgage Regulation - Beginning January 1, 2018

Effective January 1st, 2018 the Office of the Superintendent of Financial Institutions (OSFI) has implemented a new mortgage regulation intended to ensure Canadians who borrow money to buy a home are able to cope with repayment of the loan should interest rates rise. This affects home buyers seeking mortgages from federally regulated institutions, such as banks.

What is the new mortgage regulation? 

Essentially, the new qualifying mortgage regulation requires home buyers to qualify at a rate that is 2% higher than that of their negotiated rate or posted rate. For example, if a home buyer wants to qualify for a mortgage with an interest rate of 2.9%, they will now need to qualify to show that they can afford payments at a 4.9% rate (note: once qualified, the actual payments will still be calculated on the 2.9% interest rate). 

Why is this new mortgage regulation being implemented?

This measure has been implemented to ensure that institutions are lending money to home buyers who can manage their loans should interest rates rise. It is also in place to help ensure that Canadians don’t take on too much mortgage debt.

What impact will this have on home buyers?

The biggest impact this may have on home buyers is that it may reduce the size of the mortgage that home purchasers can obtain.  

What if I am renewing my mortgage?  Does this still apply?

When renewing a mortgage with their existing lender, borrowers may be exempted from the new regulation, although financial institutions do still have the option to apply it.

Does this apply at all institutions that offer mortgages?

The new regulation only applies to federally regulated financial institutions, such as banks. Some provincially-regulated institutions, such as credit unions may be exempt.  In the past, however, credit unions have voluntarily adopted new federal standards on mortgage rates, so they may implement the change as well.    


If you are considering buying or selling a home and want to know how the new mortgage regulation may directly impact you, reach out to me and I will be happy to answer your questions.   


Andrew Caronte

RE/MAX Performance Realty

phone - 204-226-3643

email -



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