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The Canadian mortgage market may face a meaningful slowdown in 2018 – potentially leading to some price relief for buyers in hot housing markets like Vancouver and Toronto, but also possibly causing some pain for alternative lenders – and rising interest rates aren’t the only culprit.

New proposals for tighter mortgage underwriting standards (B-20 guidelines) from the Office of the Superintendent of Financial Institutions (OSFI) could lead to a five to 10 per cent decline in uninsured mortgage origination volumes, and even sharper pullbacks for the alternative lenders.

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The proposed changes unveiled by the Office of the Superintendent of Financial Institutions (OSFI) on July 6, would require stress tests to qualify for all uninsured mortgages (roughly 80 per cent of the market), and would make the qualifying rate for these mortgages the contract rate plus two percentage points.