What changes are proposed for 2024?
JANUARY
OSFI Proposal?
OSFI proposed another regulation for uninsured mortgages to protect the big banks from overleveraged clients should mortgage rates decline. It wants to add another qualifying ratio (loan-to-income, LTI), which would reduce the mortgage amount approved based on the borrower's yearly income.
MARCH
OSFI Proposal, Confirmed.
The above LTI changes are now a done deal. OSFI announced that in Q1 of 2025, banks will have a cap placed on the number of new uninsured mortgages in their portfolio that are more than 4.5 times a borrower's annual gross income (the cap will differ for each lender).
This new rule could impact first-time home buyers the most, shrinking how much home they can buy based on their income (in addition to the TDS ratios already in place) when getting a mortgage approval through a traditional lender.
As rates fall (when and if they do), this regulation has the capacity to reduce single-property homeowners in Canada and favour higher-income earners and property investors, especially in higher-priced markets such as Vancouver and Toronto. Renewals and refinance aren't included in the lender LTI cap.
Read more here.
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How often are changes proposed?
OSFI reviews mortgage rules at least once per year (usually in December), and proposals to address current issues and provide forward guidance are rolled out throughout the year. Once it consults with the industry, successful proposals are formalized, which take weeks to months to become official (depending on how easy it is for lenders to implement the changes).
Outside pressure?
OSFI's rules aren't always popular with all players in the mortgage industry. This 'resistance' can lead some experts (or politicians) to think that OSFI may implement or reverse changes based on the feedback (it rarely does).