QUICK REFERENCE GUIDE: Mortgage Changes 2018

New Rule Changes- January 1st, 2018


  • On January 1st, 2018, OSFI implemented new conventional (uninsured) mortgage rules, attempting to protect homebuyers from mortgage default in a rising interest rate
  • The government introduced a rate cushion which will affect all uninsured mortgages (those with a down payment of 20% and all refinances).

They must now qualify at the greater of:

The Bank of Canada posted rate (5.14%)
Their contract rate + 2% (This means, if your rate is 3.39%, you would be qualifying at 39%)

*This results in approximately a 20% decrease in purchasing power
Example: A couple (or an individual) who has a combined income of $150,000

Maximum Purchase Price:

>Before the Stress Test: $1,050,000

>After the Stress Test: $840,000

 Difference of: $210,000


Bank of Canada Rate Increase

  • On January 17th, 2018, the Bank of Canada increased its overnight lending rate to 1.25% from 1%.
  • The major 6 banks have followed their lead, and increased their prime rate. Each lender decides what their prime rate will (For example, Scotiabank’s is 3.45% but TD Bank is 3.60%)
  • Changes in Prime influence variable interest rates and lines of

Insured Mortgages


  • Properties under 1 Million, with less than 20% down payment
  • Insured by one of three insurers in Canada
  • Minimum down payment is 5% on the first $500,000 and 10% on the difference up to $999,999
  • Borrower has to be qualified at the Bank of Canada posted rate (5.14%) even if their contract rate is lower


For a quick and up-to-date mortgage calculator, please visit this link on my website.

Compliments of The Hanley Mortgage Group

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