Office of the Superintendent of Financial Institutions (OSFI)
Idea of Stress Test Switching
The Office of the Superintendent of Financial Institutions (OSFI) first floated the idea of switching from its current “stress test” requirements — which limit borrowers to a minimum qualifying rate (MQR) of 5.25% or 2% above the borrower’s contract rate, whichever is higher.
Minimum Qualifying Rate (MQR) to the new Loan-To-Income (LTI). The rule limits the share of new uninsured mortgages that exceed 4.5 times a borrower’s gross annual income.
“OSFI will be evaluating the Loan-to-Income (LTI) limit framework until at least January 2026, after which we will determine if the LTI is an appropriate complement or replacement for…
“Canada’s shift to LTI-based lending aligns with global trends that focus on income-based affordability rather than stress testing for interest rate hikes.
Switch to an LTI model could make it harder for buyers to qualify, or, it could have the complete opposite effect, allowing more first-time homebuyers to enter the market, driving up prices and demand.
A different test for a different rate environment.
Full Read:
- https://www.canadianmortgagetrends.com/2025/06/osfi-eyes-loan-to-income-rules-to-replace-stress-test-as-industry-weighs-implications/