Definition
OSFI Guideline B-20 frames residential mortgage underwriting practices at federally regulated lenders. In force since 2012, it was revised in 2018 (adding the stress test to non-insured mortgages) and in 2023 (adjusting the qualifying rate).
Main requirements: • Mortgage stress test (qualifying at contractual rate + 2% or 5.25%, whichever is higher) for all insured and non-insured originations. • LTV cap of 80% on refinances. • LTV cap of 65% on standalone HELOCs; HELOC + traditional mortgage combination capped at 80%. • Rigorous income documentation: T4 slips, Notice of Assessment, financial statements for self-employed. • Independent property appraisal.
Since November 2024, the stress test no longer applies to non-insured transfers to a new lender (a measure aimed at increasing renewal competition). B-20 does not apply directly to provincial credit unions like Desjardins, though they often comply in practice.