The B-20 guidelines define things such as the minimum requirements borrowers must meet to receive a loan from these institutions, how these institutions measure the ability of borrowers to pay back their loans, and to an extent the rates and terms that these institutions can offer.

The full name of the B-20 is Guideline B-20 − Residential Mortgage Underwriting Practices and Procedures. It’s published and enforced by the Office of the Superintendent of Financial Institutions (OSFI) and underwrites the rules and practices that all federally regulated institutions must adhere to.

These rules define things such as the minimum requirements borrowers must meet to receive a loan from these institutions, how these institutions measure the ability of borrowers to pay back their loans, and to an extent the rates and terms that these institutions can offer.

Guideline B-20

Why am I hearing so much about it now?

The B-20 guidelines have recently been changed by the OSFI to further tighten underwriting standards for mortgages at federally regulated institutions. In effect, this will make it harder for many people to secure a mortgage from these institutions.

The final draft of the guidelines have been made public on October 17, 2017, and will come into effect on January 1, 2017. You can find the release statement as well as the final draft on the OSFI’s website.

Why is the OSFI tightening regulations?

The OSFI raised the following concerns as the reason for updating these guidelines:

  • Loans uninsured by the CMHC is growing by 14% every year.
  • ∓ 50% of the Big 6 Banks in Canada’s loans are now uninsured.
  • Almost 80% loans in Toronto and Vancouver with its high-value housing market are low-ratio mortgages (more than 20% down payment).
  • Around 50% of these loans are near (or on) this L-T-V limit.
  • By now, most of these low-ration loans have 30-year amortization periods.
  • Mortgages that have a 450% loan-to-income ratio of their borrowers have grown in two years from 19% to 27%.

Call Us Today +1 866 921 8890

Questions? We’re here to help!

Mortgage Offers

...pick the one thats right for you.

Find Out More

We Pay Your Legal Fees!

When You Close a Mortgage With Us

WE PAY YOUT LEGAL FEES,
$1000 VALUE

Get $1000 Cash Back

When You Close a Mortgage With us

RECEIVE $1000
CASH BACK

$1000 Referral Fee

When They Close a Mortgage With us

REFER A FRIEND AND GET
$1000

Featured Rates

FIXED

LenderRateTerm
Mortgage Lendwise RateLendwise

3.40%

5-Year
Mortgage First National Bank RateFirst National Financial

3.59%

4-Year
Mortgage RMG RateRMG Mortgages

3.29%

3-Year
Mortgage Street Capital RateStreet Capital Bank

3.19%

2-Year
Mortgage TD Bank RateTD Bank

3.19%

1-Year

VARIABLE

TermRate
5-Year Variable

2.75%

3-Year Variable

3.35%

OTHER

TypeRate
Line of CreditStarting at

3.00%

Equity LoansStarting at

5.99%

Private MortgagesStarting at

5.99%

What does this mean for the average borrower?

The uninsured stress test

If you have an uninsured mortgage, you will now need to prove your ability to overcome risk by meeting the requirements for a loan with a 2% higher interest rate than what you will actually be applying for. This alone will make it difficult for many to qualify for a loan in the first place.

Stricter LTV’s

Loan to value ratios is a lending risk assessment ratios that lenders use to determine the quality and risk of a specific loan. To do this, you compare the total amount of the loan or mortgage with the appraised value of the home or property. The more value the home has over the mortgage the better. Borrowers will be held to stricter and tighter LTV requirements with less leeway.

Law Hammer Justice

Lower housing demand

There is very little doubt that the extra difficulty present in securing a loan will have an effect on the demand for housing. This might cause prices to either go down which will be good news for prospective buyers but bad news for property owners.

Lower purchasing power

With the new stress test, many estimates that it could slash new purchasing power for uninsured borrowers who put down a 20% down payment by up to 15%.

Higher demand for private mortgage lending

There is no doubt that the new regulations do slightly level the playing field between federally regulated financial institutions and private lenders. Interest rates at these traditional financial institutions are bound to go up and combined with stricter requirements, private lenders will become the only option for many new borrowers.

OUR CUSTOMERS LOVE US

My wife and I recently purchased our first place, so we started to look for a mortgage broker. Neither of us really knew what we were doing, so it was important to us that we could find someone who could guide us through the whole process. After some searching we finally stumbled upon the guys at certified mortgage broker We worked with leon and his team, got a great rate and they took their time to explain and guide us through the whole process. Great rates and great service. Would absolutely recommend.
Linderman Beadles
Linderman Beadles
06:16 26 Feb 18
Got tired of sow service and mediocre rates from my bank, so I started looking for a mortgage broker. Had some family friends recommended Leon and his team, so decided to check them out. Was very impressed with Leon, he guided me through step by step, recommended a mortgage and I ended up switching to him. My rate is better and he always answers call and emails right away.
Gina Carroll
Gina Carroll
05:06 28 Feb 18
Was looking for a new mortgage broker, my old one moved so had to find someone else to work with. Didn't really know how to go about it so just started googling. After some searching and talking, decided to go with the guys at certified mortgage broker. No one could match their rates, plus their customer service is honestly some of the best i’ve seen.
Deane Laflamme
Deane Laflamme
04:40 27 Feb 18
My wife and I recently purchased our first place, so we started to look for a mortgage broker. Neither of us really knew what we were doing, so it was important to us that we could find someone who could guide us through the whole process. After some searching we finally stumbled upon the guys at certified mortgage broker We worked with leon and his team, got a great rate and they took their time to explain and guide us through the whole process. Great rates and great service. Would absolutely recommend.
Stephnie Boyles
Stephnie Boyles
13:59 15 Nov 17
Got tired of sow service and mediocre rates from my bank, so I started looking for a mortgage broker. Had some family friends recommended Leon and his team, so decided to check them out. Was very impressed with Leon, he guided me through step by step, recommended a mortgage and I ended up switching to him. My rate is better and he always answers call and emails right away.
Billye Peralta
Billye Peralta
13:38 19 Nov 17
Was looking for a new mortgage broker, my old one moved so had to find someone else to work with. Didn't really know how to go about it so just started googling. After some searching and talking, decided to go with the guys at certified mortgage broker. No one could match their rates, plus their customer service is honestly some of the best i’ve seen.
Moore Hoover
Moore Hoover
02:25 16 Nov 17
We worked with Leon and he provided a thorough and a professional process in re-financing our mortgage. Communication was consistent, he was easy to reach and documents were processed quickly. Most importantly, we got a great rate that has us savings hundreds of dollars per month on our home. These guys really know what they're doing.
Melissa Brown
Melissa Brown
00:12 18 Jul 17
As third time home buyers we couldn't be happier with the service we got from Certified mortgage broker. The team did a great job working on our loan. Everything was fast, easy and transparent. Probably the best mortgage experience i’ve ever had.
Riley Clements
Riley Clements
15:27 20 Jul 17

CONTACT US

Give us a call or email us to schedule your appointment

Certified Mortgage Brokers Across Canada

…by providing award winning customer service to each and every single client.