2017-10-31

Residential Mortgage Underwriting Practices and Procedures Guideline

OSFI issued this guideline to establish five fundamental principles for prudent residential mortgage underwriting, requiring federally-regulated financial institutions to implement comprehensive policies and robust internal controls. The framework mandates that credit decisions prioritize the borrower’s demonstrated willingness and capacity to service debt, supported by rigorous income verification, accurate debt serviceability metrics, and dynamic loan-to-value limits. Institutions must maintain transparent collateral appraisal processes, ensure compliance with anti-money laundering regulations, and align their risk appetite statements with ongoing portfolio monitoring to mitigate credit and counterparty risks.

Canada

Office of the Superintendent of Financial Institutions

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