News

Canada’s Home Loan Regulations Tighten in Response to Rising Interest Rates

1 Mins read

By Robb M. Stewart

The Office of the Superintendent of Financial Institutions (OSFI) in Canada has announced tighter guidelines for home loans, requiring banks and mortgage insurers to hold more capital for loans that have payments which do not cover the interest portion. The changes aim to align with the increased risks associated with growing mortgage balances due to elevated interest rates.

The adjustments to the buffers held for negatively amortizing mortgages will not result in an increase in monthly payments for consumers with existing mortgages, according to the OSFI. These revised capital guidelines will come into effect at the start of the next fiscal quarter, which is January 1st for most institutions. However, for major banks, the effective date will be from this November.

In recent times, interest rates have risen rapidly, leading to the central bank setting its benchmark policy rate at 5%, the highest rate seen in 22 years. Just last year, the rate stood at 0.25%. The Bank of Canada policymakers are slated to meet next week to decide on rates.

The OSFI stated that it has also made other revisions to its guidelines in order to clarify how banks and insurers should apply rules on capital. Peter Routledge, Superintendent of Financial Institutions, expressed his belief that these incremental changes enhance the resilience of Canada’s financial system. He further added that these updates are aimed at promoting prudent capital allocation against the risks taken by lenders and insurers.

Related posts
News

N. Korean tech workers faked IDs for overseas defense jobs

1 Mins read
N. Korean tech workers faked IDs for overseas defense jobs. April. 03, 2025 07:50. by 남혜정기자 [email protected]. North Korean cyberattacks involving the…
News

School curriculum resources to teach children about risks of in-game purchases

3 Mins read
The Oak National Academy – an arm’s length body to help schools deliver curriculum content – has launched a package of teaching…
News

Endeavour Silver is Producing First Batch of Concentrate at the Terronera Mine; Remains on Track for Wet Commissioning in Early Q2

3 Mins read
VANCOUVER, British Columbia, March 31, 2025 (GLOBE NEWSWIRE) — Endeavour Silver Corp. (“Endeavour” or the “Company”) (NYSE: EXK; TSX: EDR) provides a…

Leave a Reply

Your email address will not be published. Required fields are marked *

+ 6 = 9