New Ontario Mortgage Rules Oct 2016 - "Stress Test"

October 3, 2016 – Toronto, Ontario – Department of Finance Canada

Protecting the long-term financial security of Canadians is a cornerstone of the Government of Canada’s commitment to help the middle class and those working hard to join it. The Government continues to work collaboratively with its municipal and provincial partners to address the concerns of middle class families facing high debt and concerns over housing affordability, and is actively engaged in monitoring and addressing the overall health and stability of the housing market and financial system in Canada.

To that end, Minister of Finance Bill Morneau today announced three measures designed to reinforce the Canadian housing finance system, to help protect the long-term financial security of borrowers and all Canadians, and to improve tax fairness for Canadian homeowners.

Building on measures announced in December 2015, the Government will:

  • Bring consistency to mortgage insurance rules by standardizing eligibility criteria for high- and low-ratio insured mortgages, including a mortgage rate stress test;
  • Improve tax fairness by closing loopholes surrounding the capital gains tax exemption on the sale of a principal residence; and,
  • Consult on how to better protect taxpayers by ensuring that the distribution of risk in the housing finance system is balanced.

These measures follow an in-depth analysis of the housing market conducted by the Department of Finance Canada, in conjunction with various government agencies, including the Office of the Superintendent of Financial Institutions and Canada Mortgage and Housing Corporation, as well as the ongoing collaboration and information sharing done through the working group with provincial and municipal officials.

 

In Layman's Terms 

 

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Wally Buczkowski

Wally Buczkowski

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