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Ottawa plans to move forward with regulations that would make it tougher for Canadians to qualify for uninsured loans, affecting consumers with down payments of 20 per cent or more.

In final guidelines published Tuesday, the Office of Superintendent of Financial Institutions even tweaked its original proposal forcing borrowers to also qualify for mortgages based on a potentially higher Bank of Canada five-year posted rate, a restriction Ottawa forced on all government-backed loans back in 2016.

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This is the most ground-shaking mortgage rule change of all time. That's not hyperbole RateSpy.com

The new stress test is the latest in a series of policy changes and rules aimed at ensuring Canadians can afford their homes even if interest rates rise.

“OSFI hasn’t just tapped the brakes, it’s jumped on the brakes with both feet,” said Rob McLister, founder of RateSpy.com.

“Uninsured borrowers can qualify for a mortgage today at rates as low as 2.97% on a 5-year fixed. In a few months that hurdle will jump to almost 5%.”

McLister said at least one in six mortgagors with 20 per cent equity could be affected by the new guidelines.

All other things being equal, “those folks will need almost 20% more income to qualify for the same size mortgage they can get today,” he said.

“Given where our housing market and debt levels are at, this is the most ground-shaking mortgage rule change of all time. That’s not hyperbole,” McLister added.