B-20 is Stressing Potential Home Buyers

Aug 28, 2019

Posted by
Matt Mayers
Senior Policy Analyst


The federal B-20 stress test is preventing many British Columbians from achieving their dream of home ownership.


The Office of the Superintendent of Financial Institutions enacted new mortgage rules in 2018, requiring borrowers to qualify for a mortgage at the higher of either the rate they’ve negotiated with their bank plus two per cent or the Bank of Canada’s five-year rate.

BCREA's Economics Department published a Market Intelligence Report concluding that, without the stress test, home sales in BC would have been about ten per cent higher in 2018. The stress test resulted in an estimated $500 million of lost revenue in BC.

We're calling on the next federal government to alleviate the negative effects of the stress test with two recommendations:

  1. reinstate 30-year amortizations for both insured and uninsured mortgages, and
  2. reduce the current risk buffer from two per cent to one per cent.

BCREA is meeting with Members of Parliament to ensure that the stress test and housing affordability in BC remain at the forefront during the federal election campaign. So far, we've met federal Liberal MP Randeep Sarai and senior advisor to the PMO Ben Chin to share our proposed amendments to the stress test. In early August we discussed housing issues with federal NDP leader Jagmeet Singh. We also explained our concerns with his proposed national foreign buyers tax here.

We're working with other real estate sector organizations to create a joint statement on the B-20 stress test and other housing affordability recommendations. The goal is to help candidates understand how to help make BC housing more accessible and affordable.

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