Canada Relaxes Mortgage Qualification Rules as Rates Fall
Finance Minister Bill Morneau is relaxing mortgage qualification rules to make it easier for home buyers to secure financing, a move that could give Canada’s real-estate market another boost.
The finance department announced it will set up a new benchmark interest rate used to determine whether people will qualify for an insured mortgage that will be based on actual borrowing costs, rather than advertised rates. The existing qualification rule, which was introduced in 2016, wasn’t responsive enough to a recent drop in lending interest rates — effectively making the stress test too tight.
“For many middle class Canadians, their home is the most important investment they will make in their lifetime,” Morneau said in a statement. “Our government has a responsibility to ensure that investment is protected and to support a stable housing market.”