Changes to Stress Test Mean Good News for British Columbians

Feb 25, 2020

Posted by
Matt Mayers
Senior Policy Analyst


The advocacy of BCREA and other stakeholders has resulted in the Federal Minister of Finance Bill Morneau announcing changes to the mortgage stress test.

The stress test is used to determine the minimum qualifying rate for mortgages. The new benchmark rate will be the weekly median five-year fixed insured mortgage rate from mortgage insured applications, plus two per cent. Changes will take effect on April 6, 2020.

Last year, we published a Market Intelligence Report, which concluded that the stress test resulted in an estimated $500 million of lost economic activity in BC in 2018. We met with several Members of Parliament, including NDP leader Jagmeet Singh and Liberal MP Randeep Sarai, in addition to senior advisor to the Prime Minister’s Office Ben Chin. We also worked with other real estate sector organizations to create a joint statement on the stress test and other housing affordability recommendations.

We hope this is the first of several changes to the stress test. BCREA, the Canadian Real Estate Association and regional BC real estate boards will provide further input as the Office of the Superintendent of Financial Institutions has announced that they are considering the same benchmark rate for uninsured mortgages. We will continue recommending:

  • reviewing the mortgage stress test to ensure the realities of local real estate markets are taken into consideration, and
  • allowing existing mortgage holders to be exempted from the stress test at the time of renewal.

While there’s still more work to be done, this small step will allow more British Columbians to achieve their dream of homeownership.

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