Stress test to impact ‘move-up’ home buyers the most

The newest set of mortgage restrictions announced by the Office of the Superintendent of Financial Institutions (OSFI) will hit home buyers looking to upgrade to new properties the hardest, according to BMO financial group chief economist Doug Porter.

Move-up buyers would be disproportionately impacted because they would be most likely to have home equity and qualify for an uninsured mortgage, Porter explained.
The guidelines, similar to OSFI’s draft release in July, are scheduled to take effect on January 1, 2018.

“This is potentially more wide ranging and it will dampen the housing market in 2018, probably more significantly than we saw (with) the earlier federal measures,” Porter told the Toronto Star.

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