Definition
OSFI Guideline B-20 (Residential Mortgage Underwriting Practices and Procedures) is the central regulatory directive governing how Canadian banks evaluate and grant residential mortgages.
**Key requirements**: 1. **Stress test**: borrowers must qualify at the qualifying rate (contract rate + 2% or BoC minimum rate, whichever is higher) — even for conventional (uninsured) loans 2. **LTV limits**: maximum LTV 80% for uninsured conventional loans; LTV >80% requires CMHC/Sagen/CG insurance 3. **Amortization**: maximum 25 years for insured loans; max 35 years for conventional loans (revised 2024) 4. **Income documentation**: strict income verification requirements 5. **DSCR/GDS/TDS**: compliance with ratios
**History of key revisions**: - 2012: introduction of stress test (BoC 5-year posted rate) - 2018: extension of stress test to conventional loans - 2021: qualifying rate raised to contract rate + 2% (minimum 5.25%) - 2024: 30-year amortization for first-time buyers (new homes) outside B-20
**Applies to**: All federal financial institutions (chartered banks). Does not directly apply to provincial credit unions (similar provincial rules) or private lenders.