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Ottawa unveils new mortgage stress test rules that will make it easier to pass


government will change the rules that cover mortgage lending

Starting in April, the government will change the rules that cover mortgage lending in a way that should, in the short term at least, make it easier to qualify for a loan to buy a home.


The Department of Finance says that as of April 6, the so-called "stress test" for mortgages will be calculated in a new way.


The stress test was implemented in January 2018 as a way to let some of the speculation out of the housing market at the time. It does so by making sure borrowers will be able to pay down their debts even if rates move higher. A would-be borrower is tested against his or her ability to pay down the loan at a higher interest rate, and if the borrower fails the test, a lender isn't allowed to loan them money.


The rules had the effect of cooling the market, especially for first time buyers, which brought down prices in many markets because it shrank the pool of buyers.



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