Insured and Uninsured Mortgage Stress Test Changes Confirmed for June 1

Marci Deane • May 21, 2021

This change does not impact existing mortgage holders or buyers who already have a firm approval in place for an upcoming purchase.

Starting June 1, both insured and uninsured mortgage borrowers will be subject to a stricter stress test when qualifying for their mortgage.


The Office of the Superintendent of Financial Institutions (OSFI) confirmed on Thursday that it will move ahead with its stress test changes first announced last month, which will apply to uninsured mortgages (typically those with more than a 20% down payment).


Soon after, the Department of Finance confirmed it will follow OSFI’s lead, and apply the same higher qualifying rate to insured mortgages, or those with less than 20% down.


In both cases, borrowers will need to prove they can afford payments based on the higher of the contract rate plus 2%, or a new floor rate of 5.25%, up from the current 4.79%.


“The recent and rapid rise in housing prices is squeezing middle class Canadians across the entire country and raises concerns about the stability of the overall market,” Finance Minister Chrystia Freeland said in a statement. “The federal government will align with OSFI by establishing a new minimum qualifying rate for insured mortgages…It is vitally important that homeownership remain within reach for Canadians.”


Both OSFI and the DoF said they will review the floor rate annually, likely each December at a minimum.


The Impact on Borrowers

Applying the higher stress test to insured borrowers will impact roughly 1 in 5 mortgage borrowers, according to data from the Bank of Canada. It will also take direct aim at first-time borrowers who are more likely to be putting less than 20% down on a mortgage.


The higher minimum stress test is expected to cut maximum buying power by between 4% and 4.5%. For a median-income household, that would reduce the maximum purchase price from $442,000 to $422,000, according to previous estimates from National Bank.


It’s estimated that this change will reduce purchasing power for uninsured borrowers by between 4% and 4.5%. By comparison, the B-20 stress test implemented in January 2019 requiring homebuyers to qualify at the higher of either the 5-year posted rate or the contractual rate plus 200 basis points reduced purchasing power by 22%.


“Today’s news is both bad news and good news for (first-time buyers),” wrote Rob McLister, mortgage editor at RATESDOTCA. “Obviously, it cuts buying power, but that also means fewer people will be able to bid as much for homes, reducing some price pressure.”


Mortgage Professionals Canada issued a statement to members on Thursday, noting it was disappointed that the minister decided to move so quickly in applying the stricter stress test to insured mortgages.


“Given the traditional audience for insured mortgages, namely young aspiring middle-class families, single individuals, and the recently separated, all owner occupiers of the properties they purchase, MPC would have preferred the insured qualification rate had not been increased in the interest of this community,” the association said. “Given the rapid rise in prices, making qualification more stringent now will disqualify many of the Canadians the government has promised to support.”


Bank of Canada Concerned About Home Prices, Household Debt

The new stress test changes fell on the same day that the Bank of Canada voiced concern about unsustainable house prices and growing household debt.


“It is important to understand that the recent rapid increases in home prices are not normal,” Bank of Canada Governor Tiff Macklem said following the release of the Bank’s annual Financial System Review, which found the share of highly indebted households taking out mortgages is now up to 22%.


“Some people may be thinking that the kind of price increases we have seen recently will continue. That would be a mistake,” Macklem added. “Interest rates are very low. That means there is more potential for them to go up…Borrowers and lenders both have roles in ensuring that households can still afford to service their debt at higher rates.”


The Bank also unveiled a “House Price Exuberance Indicator” meant to measure nine major markets across Canada for expectations that local home prices will continue to rise. The indicator currently finds that the Toronto region, Montreal and Hamilton are in exuberant territory, with Ottawa not far off.


courtesy of https://www.canadianmortgagetrends.com

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Bank of Canada Holds Rate at 2.25% — April 29, 2026

By Marci Deane • April 29, 2026
The Bank of Canada announced today that it is holding its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. This decision comes against a backdrop of significant global uncertainty — and for Canadian homeowners, buyers, and anyone with a mortgage coming up for renewal, here's what it means.

Your Guide to Successfully Navigating the Housing Market

By Marci Deane • April 22, 2026
Wondering If Now’s the Right Time to Buy a Home? Start With These Questions Instead. Whether you're looking to buy your first home, move into something bigger, downsize, or find that perfect place to retire, it’s normal to feel unsure—especially with all the noise in the news about the economy and the housing market. The truth is, even in the most stable times, predicting the “perfect” time to buy a home is incredibly hard. The market will always have its ups and downs, and the headlines will never give you the full story. So instead of trying to time the market, here’s a different approach: Focus on your personal readiness—because that’s what truly matters. Here are some key questions to reflect on that can help bring clarity: Would owning a home right now put me in a stronger financial position in the long run? Can I comfortably afford a mortgage while maintaining the lifestyle I want? Is my job or income stable enough to support a new home? Do I have enough saved for a down payment, closing costs, and a little buffer? How long do I plan to stay in the property? If I had to sell earlier than planned, would I be financially okay? Will buying a home now support my long-term goals? Am I ready because I want to buy, or because I feel pressure to act quickly? Am I hesitating because of market fears, or do I have legitimate concerns? These are personal questions, not market ones—and that’s the point. The economy might change tomorrow, but your answers today can guide you toward a decision that actually fits your life. Here’s How I Can Help Buying a home doesn’t have to be stressful when you have a plan and someone to guide you through it. If you want to explore your options, talk through your goals, or just get a better sense of what’s possible, I’m here to help. The best place to start? A mortgage pre-approval . It’s free, it doesn’t lock you into anything, and it gives you a clear picture of what you can afford—so you can move forward with confidence, whether that means buying now or waiting. You don’t have to figure this out alone. If you’re curious, let’s talk. Together, we can map out a homebuying plan that works for you.

How to Raise Your Credit Score and Unlock Better Rates

By Marci Deane • April 15, 2026
Want a Better Credit Score? Here’s What Actually Works Your credit score plays a major role in your ability to qualify for a mortgage—and it directly affects the interest rates and products you’ll be offered. If your goal is to access the best mortgage options on the market, improving your credit is one of the smartest financial moves you can make. Here’s a breakdown of what truly matters—and what you can start doing today to build and maintain a strong credit profile. 1. Always Pay On Time Late payments are the fastest way to damage your credit score—and on-time payments are the most powerful way to boost it. When you borrow money, whether it’s a credit card, car loan, or mortgage, you agree to repay it on a schedule. If you stick to that agreement, lenders reward you with good credit. But if you fall behind, missed payments are reported to credit bureaus and your score takes a hit. A single missed payment over 30 days late can hurt your score. Missed payments beyond 120 days may go to collections—and collections stay on your report for up to six years . Quick tip: Lenders typically report missed payments only if they’re more than 30 days overdue. So if you miss a Friday payment and make it up on Monday, you're probably in the clear—but don't make it a habit. 2. Avoid Taking On Unnecessary Credit Once you have at least two active credit accounts (like a credit card and a car loan), it’s best to pause on applying for more—unless you truly need it. Every time a lender checks your credit, a “hard inquiry” appears on your report. Too many inquiries in a short time can bring your score down slightly. Better idea? If your current lender offers a credit limit increase , take it. Higher available credit (when used responsibly) actually improves your credit utilization ratio, which we’ll get into next. 3. Keep Credit Usage Low How much of your available credit you actually use—also known as credit utilization —is another major factor in your score. Here’s the sweet spot: Aim to use 15–25% of your limit if possible. Never exceed 60% , especially if you plan to apply for a mortgage soon. So, if your credit card limit is $5,000, try to keep your balance under $1,250—and pay it off in full each month. Maxing out your cards or carrying high balances (even if you make the minimum payment) can tank your score. 4. Monitor Your Credit Report About 1 in 5 credit reports contain errors. That’s not a small number—and even a minor mistake could cost you when it’s time to get approved for a mortgage. Check your report at least once a year (or sign up for a monitoring service). Look for: Incorrect balances Accounts you don’t recognize Missed payments you know were paid You can request reports directly from Equifax and TransUnion , Canada’s two national credit bureaus. If something looks off, dispute it right away. 5. Deal with Collections Fast If you spot an account in collections—don’t ignore it. Even small unpaid bills (a leftover phone bill, a missed utility payment) can drag down your score for years. Reach out to the creditor or collection agency and arrange payment as quickly as possible . Once settled, ask for written confirmation and ensure it’s updated on your credit report. 6. Use Your Credit—Don’t Just Hold It Credit cards won’t help your score if you’re not using them. Inactive cards may not report consistently to the credit bureaus—or worse, may be closed due to inactivity. Use your cards at least once every three months. Many people put routine expenses like groceries or gas on their cards and pay them off right away. It’s a simple way to show regular, responsible use. In Summary: Improving your credit score isn’t complicated, but it does take consistency: Pay everything on time Keep balances low Limit new credit applications Monitor your report and handle issues quickly Use your credit regularly Following these principles will steadily increase your creditworthiness—and bring you closer to qualifying for the best mortgage rates available. Ready to review your credit in more detail or start prepping for a mortgage? I’m here to help—reach out anytime!