What does the minimum qualifying rate in OSFI's Guideline B-20 require for an uninsured mortgage from a federally regulated lender in British Columbia?
Correct Answer
D) Borrowers must qualify at the greater of contract rate plus 2% or 5.25%
OSFI Guideline B-20 says the qualifying rate for all uninsured mortgages should be at least the greater of the contract rate plus a buffer and a floor rate, both set by the Superintendent. OSFI currently sets the buffer at 2% and the floor at 5.25%. Insured mortgages are not qualified under B-20's rate; for them lenders follow the mortgage insurers' debt service requirements.
Why This Is the Correct Answer
This answer is correct. For uninsured mortgages, B-20 sets the minimum qualifying rate at the greater of the contract rate plus the 2% buffer or the 5.25% floor.
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