Bank Watchdog Keeps Rule That’s Slowing Canada Mortgage Lending

Canada’s banking regulator maintained the qualifying test it imposes on mortgage borrowers, keeping pressure on the nation’s prospective home buyers.

Borrowers who are applying for uninsured mortgages must go through a so-called “stress test”, officially known as the minimum qualifying rate, to ensure they can handle a future increase in rates. The MQR will remain the greater of 5.25% or the bank’s contract rate plus 2 percentage points, the Office of the Superintendent of Financial Institutions said in a statement Tuesday.

Typical mortgage rates at major banks are now between 6% and 7%, meaning home buyers will have to prove ...