On Thursday, the Office of the Superintendent of Financial Institutions (OSFI) launched a public consultation to assess the additional measures put in place for mortgage borrowing debt repayment.
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OSFI wants debt reduction measures to be considered after taking out a home loan as risks have increased since the pandemic began.
It therefore intends to take a closer look at Guideline B-20 “Practices and Procedures for Underwriting Residential Mortgage Loans”, which has been in force since 2012.
“Sound mortgage underwriting practices remain the cornerstone of stability in the residential mortgage industry,” said Tolga Yalkin, Assistant Superintendent, Strategic Innovation and Stakeholder Relations, in a statement. “We are interested in hearing the relevant bodies’ views on how the various debt repayment measures can support this important policy objective.”
Debt repayment metrics account for loan-to-income (LPR) and debt-to-income (DIR) ratio constraints, debt repayment coverage constraints, and affordability stress test interest rates.
Authorities wishing to take part in the consultation have until April 14.