Alternative lenders are thriving in the wake of the mortgage stress test so much so that, in early January, news reports claimed that the Federal Finance Minister Bill Morneau had considered expanding the mortgage rules to cover more lenders.
On January 29, 2019, Morneau confirmed that he is not considering imposing stress tests on private mortgage lenders, similar to those Canada has put on federally-regulated banks.
The federal government introduced stress tests in early 2018 to cool the hottest markets — such as Toronto and Vancouver — that have limited some people’s ability to qualify for mortgages and reduced the size of new loans.
As a result, some of that business is now going to private lenders, which are beyond the reach of the Office of the Superintendent of Financial Institutions (OSFI).
Others are using mortgage investment corporations and credit unions, which are provincially regulated and not required to implement the stress test.
This is good news for those who have been declined mortgage financing under the B-20 mortgage stress test. There are still alternatives out there in the form of private and second mortgage financing options. If you have been declined mortgage financing under the 2018 mortgage stress test, but are interested in seeing how much you can qualify from alternative lenders, schedule a call with us today. We’d be happy to help you get into your dream home!
