# How does B-20 impact private mortgage borrowers?

> Guideline B-20 ensures that all federally regulated financial institutions (FRFIs) adhere to prudent mortgage underwriting practices.

Category: Strategy
Last verified: 2026-02-18
Source: https://ratellow.com/faqs/strategy/how-does-b-20-impact-private-mortgage-borrowers

## Answer
Guideline B-20 ensures that all federally regulated financial institutions (FRFIs) adhere to prudent mortgage underwriting practices. This directly influences the standards they'll apply when borrowers eventually seek a mortgage with them. It's vital to understand how FRFIs assess borrowers for successful exit strategies from private lending. For instance, a homeowner uses a private mortgage for renovations, increasing property value. To refinance with a bank under OSFI's B-20, meticulous tracking of income and expenses becomes essential to showcase repayment capacity.

## Institutional highlights
- Lenders have rules to make sure you can comfortably afford your mortgage.
- Lenders must have a detailed mortgage approval process that matches how much risk they're willing to take.
- Lenders will check if you're both willing and able to repay your mortgage.
- Lenders must test how their mortgages would perform if interest rates rise or the economy weakens.
- Lenders are extra careful when approving mortgages that are considered riskier, like some private mortgages.

## Related guide
- https://ratellow.com/guides/private-mortgage-exit-strategy

## Sources
- I. Purpose and scope of the guideline — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#1.0
- 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
- IV. Other guidance — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#4.0