How do FRFIs determine my eligibility for a mortgage?
FRFIs assess your eligibility based on five core principles, focusing on governance, borrower assessment, property value, and risk management.
They refer directly to the OSFI Guideline B-20 framework.
Key Points
Your lender has a detailed plan for approving mortgages, based on how much risk they're willing to take.
The lender checks your identity, history, and how likely you are to repay the mortgage.
The lender carefully looks at whether you can comfortably afford your mortgage payments.
The lender assesses the value of the property you want to buy and how well it will be maintained.
The lender manages risks through things like mortgage insurance, to make sure your mortgage is secure.
Technical Research Verification
Our systems synchronized 3 data points and regulatory frameworks to verify this technical brief.
Related Questions
How does the stress test differ for fixed vs. variable in 2026?
Both are stress-tested at the higher of the benchmark (5.25%) or the contract rate + 2%.
Why are 3-year fixed rates dominating the 2026 market?
Borrowers are hesitant to lock in for 5 years at current levels, but find 1-2 year rates too expensive.
Fixed vs. Variable Comparison Table
Fixed locks a 5-year rate with IRD penalty risk; variable floats with prime and typically caps break fees at 3 months interest.
What is the 'IRD' penalty risk for 5-year fixed borrowers?
The Interest Rate Differential (IRD) can cost tens of thousands if you break a fixed mortgage when market rates have dropped.