TORONTO, Dec 17 (Reuters) – Canadian authorities left the benchmark for the country’s mortgage stress test unchanged on Friday, despite growing concerns about a red-hot housing market that shows no sign of cooling.
The Office of the Superintendent of Financial Institutions (OSFI) said the minimum qualifying rate for uninsured mortgage borrowers will stay at 5.25%, This makes the benchmark either the rate the borrower pays plus 200 basis points, or 5.25%, whichever is greater.
Uninsured borrowers are required to make at least a 20% down payment.
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Canada’s Finance Department said separately it too will leave the rate unchanged for insured mortgages, which fall under its purview.
The S&P/TSX banking index (.GSPTXBA) fell0.4% on the Toronto Stock Exchange, compared with a 0.3% increase in the broader benchmark (.GSPTSE).
Since June 1, when OSFI began enforcing the current minimum rate in response to increased vulnerabilities, including rising home prices and household indebtedness, the national average sale price has increased 3.5%. read more
Canadian house prices are up nearly 20% from a year ago, setting a record in November, exacerbating affordability concerns and …….