2023-01-12

Guideline B-20: Residential Mortgage Underwriting Practices and Procedures

OSFI issues Guideline B-20 to require federally regulated financial institutions to maintain robust residential mortgage underwriting standards amid record household debt and rising interest rates. The guideline mandates a minimum qualifying rate stress test, ensuring lenders verify borrowers can absorb rate shocks by meeting strict debt service ratio thresholds. By continuously monitoring loan-to-income and loan-to-value metrics alongside extended amortization periods, OSFI aims to mitigate potential lender losses and preserve overall financial system stability.

Canada

Office of the Superintendent of Financial Institutions

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