Industry Reaction to the Stress Test Change
Mortgage Professionals Canada (MPC) has been calling for the stress test rates to be uncoupled from the Bank of Canada’s posted 5-year fixed rate since the insured stress test was introduced in 2016. The association welcomed the announcement, saying the use of a floating rate will make the stress test more dynamic and responsive to changing markets and bond rates. “We thank the government for acknowledging this issue and making these changes,” Paul Taylor, President and CEO of MPC, wrote in an email to membership. “We do, however, still consider a two percent (2%) buffer to be an onerous test level given the economic realities globally”. Taylor said the association will continue to ask for additional support measures for those