What is a Loan-to-Income (LTI) limit, and how might it impact future mortgage lending?
LTI limits are applied to a bank's entire mortgage portfolio, not individual borrowers, and aim to reduce risks from high household debt levels.
Key Points
Loan-to-income limits won't directly affect whether you get approved for a mortgage.
Banks are expected to start using loan-to-income limits in early 2025.
Regulators will monitor how well these new loan-to-income limits are working.
Primary sources
Primary sources cited by the Ratellow Research Team. Editorial standards · Correction policy
Related Questions
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.
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.