AMF proposes adjustment to its framework respecting uninsured residential mortgage loans

Mortgage brokerage Organization

Montréal – The Autorité des marchés financiers (the “AMF”) continually tracks changes in household debt levels in Québec and documents those changes in its annual reports on financial institutions. It is from this perspective that the AMF is proposing to revise the qualifying rate for uninsured residential mortgage loans in order to mitigate the risk of an increase in mortgage loan defaults.

The proposed new qualifying rate is the higher of the contractual mortgage rate plus 2% or 5.25% as a minimum floor.

The main objective of the proposed measure continues to be to add a margin of safety that ensures borrowers will have the ability to make mortgage payments in the event of a change in economic conditions. This measure will also maintain alignment of the rules applicable to financial institutions regulated by the AMF with those applicable to federally regulated institutions.

The AMF today published on its website a notice This link will open in a new window that provides details about the proposed changes. Interested parties are invited to submit their comments to the AMF by May 7, 2021.

The Autorité des marchés financiers is the regulatory and oversight body for Québec’s financial sector.

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