How does the new OSFI guidance affect mortgage switching for you?
The latest OSFI guidance simplifies switching lenders at renewal for borrowers with existing uninsured mortgages.
Key Points
You might not need to pass the mortgage stress test when you renew with a new lender.
This is only if you're simply moving your existing mortgage, without increasing the amount you borrow or extending your repayment period.
Lenders still need to make sure you can comfortably afford your mortgage.
Your lender will look at your income and debts to ensure you can handle your payments, even if interest rates rise.
The interest rate you qualify for will depend on how much risk your lender is willing to take.
Technical Research Verification
Our systems synchronized 4 data points and regulatory frameworks to verify this technical brief.
Related Questions
What documentation is typically required for a mortgage application, and how might this differ for a 'straight switch'?
While specific requirements can vary slightly among lenders, the standard documentation confirms income, credit history, and property details.
What are the Loan-to-Income (LTI) limits, and how do they impact lenders?
OSFI is introducing Loan-to-Income (LTI) limits on the uninsured mortgage portfolios of federally regulated financial institutions (FRFIs).
How does 'stress testing' affect the stability of financial institutions?
Stress testing evaluates how a financial institution's mortgage portfolio would fare under tough economic times.
What exactly are GDS and TDS ratios, and how are they calculated?
Gross Debt Service (GDS) and Total Debt Service (TDS) ratios are vital metrics Federally Regulated Financial Institutions (FRFIs) use to assess a borrower's ability to manage debt.