Bank of Canada Says Stress Tests Limited Price Growth, Delinquencies

#bankofcanada #OSFI #canadianrealestate

A new study from the Bank of Canada says that OSFI’s 2016 Mortgage Stress Test helped limit delinquencies once it raised rates in 2022/23, while the 2018 Stress Test (which tested everyone) helped limit price/mortgage growth.

Links:

Mortgage stress tests and household financial resilience under monetary policy tightening:

Bank of Canada's Carolyn Rogers warns against ‘tinkering’ with mortgage market:

Bank of Canada Scolds Trudeau on Mortgage Rules: 'There Is No Free Lunch':

Posthaste: Five market predictions in the wake of the 'hottest year in Canadian real estate history':

OSFI sets new mortgage rules, including stress test for uninsured borrowers:

Bank of Canada raises its key interest rate to 5%:

OSFI maintains Minimum Qualifying Rate for uninsured mortgages:

What economists think of Trudeau's temporary tax cut, $250 cheques:

Freeland says Canada will expand 30-year amortization, raise insured mortgage cap:

Mark Mitchell – Mortgage Broker London Ontario
920 Commissioners road east
London, Ontario N5Z 3J1
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[TheHaubie]

Your well-placed clips never get old!! Love how you get your points across while entertaining us!

[pilotgirl]

Totally agree. BOC is concerned with the changes and doesn’t want the housing market to take off again. Personally I think the stress test did its job.

[Shawn_Canadian_Tundra]

Brace yourselves for more inflation . With $250 from Federal government, $200 from provincial government and temporary holiday on HST for certain items, it’s time for the working middle class families to start paying for these things in the form of higher interest rates again! . Sigh . When you just thought, the inflation was coming down, this announcement came as a kicker to the nuts. There is nothing called free money and every 8 year old knows this.

[martinspartn]

Purchase insight: We just bought our first home in a city similar to London just a few hours south. Came in under asking and had our offer accepted with an inspection condition, no competing offers. Home was on the market for 30+ days. Prior two offers accepted at higher prices fell through because of financing conditions, couldn’t sell their homes for the purchase in time/receive correct price. May not be an average experience but a huge difference from what we would have expected a year or two prior.

[ADobbin]

Yes, that's what they were there for. To limit the amount of money were allowed to borrow to keep them from borrowing more than they could afford.

[Casey-qmnd]

I am eagerly awaiting your next vid on the proposed 25% tarrifs

[bilsid]

The stress test needs to be tighter to be honest. I think we will have more of these interest rate swings in the future like we saw these last few years

[Ray-cjzw]

That's assuming every lender and loan takers went by the book and disclose the real incomes!

[JimmyHat-kt]

I get the same feeling about stagnation, it worked in 08 for the soft landing in Canada i think they're looking to replicate that

[andrewvader]

Canadas real estate market is like the stock market only we want to live in these homes.

[tz]

Thanks Mark for the report! Yes delinquency prevented, with these amortization extensions, who got the hair cut? Just wondering 🤔...

[lettuceforbuns]

"You're supposed to love me when all you do is hurt me" (Realtors to BoC). LOLOL

[peterfets]

All this changed was a rich boomer parent had to cosign or gift DP

[InfraredVision]

"Or in 2024 neither." savage lol

[gechgr]

lol!! Stupid Bank of Canada.
The stress test was an awfully dumb policy.
Instead of tackling to the root causes of un-affordability, the stress test simply papered them over.
Yes, the situation would have been worse without it, but the issues that that it papered over STILL haven’t been fixed.

[DrMarkyMark]

The government of Canada needs the middle class to continue to believe they are rich. Increasing house prices make it easier for big government to continue to tax us even more at all levels. Trudeau has doubled spending in the last decade!

[devstatingx]

All the good land to develop got bought up 40 years ago and is being hoarded. Canada is literally the game of monopoly. Probably why I don't invest here.

[mogulrider]

How is everyone liking the downward side of the bubble popping? Fun isn't it?
It's barely started btw...,

[ruthmurray]

How will Trump's recent tariff "announcement" affect the housing market?

[Stormshfter]

All who can afford to should donate the $250 to the conservative party.
They could take over the mainstream media with campaign commercials.
Wouldnt that be sweet justice.