The Office of the Superintendent of Financial Institutions (OSFI) published a transcript of a virtual discussion in which Superintendent Peter Routledge outlined OSFI’s direction on residential mortgage underwriting, confirming that the uninsured mortgage minimum qualifying rate stress test under Guideline B-20 will continue alongside OSFI’s loan-to-income (LTI) flow limits. The remarks also set out OSFI’s wider regulatory modernization agenda and flagged ongoing consultations on credit risk management expectations and bank capital rules. Routledge described the LTI flow limit as a backstop on the share of new uninsured mortgages with LTI ratios above 450 percent, noting institutions may allocate a 20 percent to 25 percent cap and that the tool is currently not expected to bind until the system-wide share rises into the mid-20s from around 16 percent to 18 percent. He said federally regulated lenders have not asked OSFI to remove the minimum qualifying rate or otherwise change B-20, while OSFI has eliminated 52 guidance documents representing more than 600 pages, shortened timelines for entry into the banking system, and is streamlining approvals and adjusting risk-weighted assets for Small and Medium-Sized Deposit-Taking Institutions’ loans. On capital, OSFI’s benchmarking work compares Canadian systemically important banks (SIBs) with international peers and a consultation on draft Capital Adequacy Requirements revisions proposes more granular treatment for land acquisition, development and construction lending and lower standardized risk weights for some SME, investment-grade corporate and exposures to Canadian SIBs. The discussion also reiterated supervisory focus areas including mortgage renewals through end-2027, condo-market exposures, AI-enabled document fraud, and ensuring institutions monitor, understand and report exposures to non-bank financial intermediation. OSFI is seeking input as part of its Credit Risk Management guideline consultation by July 29, and expects to consult on any proposed income verification expectations as part of a draft chapter likely in 2027. Draft CAR revisions remain out for comment.
Office of the Superintendent of Financial Institutions 2026-02-17
Office of the Superintendent of Financial Institutions signals mortgage loan-to-income flow limits are permanent and keeps the uninsured mortgage stress test
The Office of the Superintendent of Financial Institutions (OSFI) confirmed the continuation of the uninsured mortgage minimum qualifying rate stress test under Guideline B-20 and outlined its regulatory modernization agenda. Superintendent Peter Routledge highlighted the LTI flow limit as a backstop for new uninsured mortgages and discussed ongoing consultations on credit risk management and bank capital rules. OSFI is streamlining processes for Small and Medium-Sized Deposit-Taking Institutions and revising Capital Adequacy Requirements for various lending exposures.