Effective November 21, 2024, borrowers renewing their residential uninsured mortgage can switch lenders without being subject to The Mortgage Stress Test Rule introduced back in 2018 – so long as it’s what OSFI refers to as a “straight switch” (Amount and Amortization being the same).
At present, at mortgage renewal time, a borrower finds it more practical, if not the only option, to renew with their existing Lender, even if the rate was not the most competitive market-place offer. If a borrower wanted to switch to a new lender for a better rate resulting in lower monthly payments, the OSFI-imposed Mortgage Stress Test requirements would be reapplied by the new lender, sometimes making qualification more difficult.
With this new rule ”relaxation”, two things will change:
• Homeowners will be able to look for competitive rates at renewal time.
• Lenders will become more competitive in the renewal rates being offered to retain existing mortgage holders about to renew.
It’s a good change for consumers, as it opens up ”market-place” options.
