Canadian mortgage tweaks may add to housing imbalances – economists

canada

The Canadian government has tweaked the hurdle rate for consumers to qualify for a mortgage, but economists argue the move may compound recent concerns about household indebtedness and financial stability.

Effective from April, the mortgage ‘stress test’ qualifying rate for insured mortgages will be either the borrower’s contract rate, or the weekly median five-year fixed insured rate plus 200 basis points, whichever is higher.

Currently, the test is based on the borrower’s contract rate or

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