# How does OSFI's 'straight switch' rule affect debt consolidation?

> OSFI's 'straight switch' rule provides opportunities for debt consolidation.

Category: Renewal
Last verified: 2026-02-18
Source: https://ratellow.com/faqs/renewal/how-does-osfis-straight-switch-rule-affect-debt-consolidation

## Answer
Consider these factors:

| Factor                   | Description                                                                                                      |
|--------------------------|------------------------------------------------------------------------------------------------------------------|
| **MQR Exemption**        | Uninsured 'straight switches' are exempt from the Superintendent-prescribed MQR.                                   |
| **No Increase**         | The exemption applies ONLY to transfers with no increase in loan amount or amortization.                         |
| **Sound Underwriting**   | Institutions must still apply sound residential mortgage underwriting principles (Guideline B-20).             |
| **Debt Service Ratios**  | GDS and TDS ratios must be calculated conservatively, stressed for varied economic conditions.                    |
| **Loan-to-Income Limits** | LTI limits on institutional mortgage portfolios do not apply to individual borrowers during renewals. |

## Institutional highlights
- You might not need to pass the mortgage stress test when you switch lenders at your mortgage renewal.
- This only works if you don't increase your mortgage amount or extend your payment schedule when you renew.
- Lenders will still carefully review your application 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.
- Don't worry, rules about how much lenders can loan overall don't affect your individual mortgage renewal.

## Related guide
- https://ratellow.com/guides/debt-consolidation-renewal

## Sources
- OSFI exempts uninsured mortgage straight switches from the prescribed MQR and implements portfolio LTI limits — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/osfi-exempts-uninsured-mortgage-straight-switches-prescribed-mqr-implements-portfolio-lti-limits
- Debt service coverage — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#2.3.3
- Disclosure requirements — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#3.1