Big changes could be coming to the way Canadians qualify for a mortgage, and it might open new doors for buyers across the country.

Canada’s banking regulator, the Office of the Superintendent of Financial Institutions (OSFI), is exploring a potential shift away from the current mortgage stress test toward a new model called Portfolio Level Risk Management. While still in the proposal stage, this change could significantly reshape how banks assess mortgage applicants, and who ultimately gets approved.

So, what does this mean for you?

Under the current rules, buyers must qualify for their mortgage using a higher interest rate (currently 5.25% or more), even if their actual rate is lower. This is meant to ensure they could still afford their payments if rates rise.

But under the proposed system, the focus would shift from individual borrowers to the overall risk profile of the bank’s mortgage portfolio. Instead of testing every applicant at a fixed high rate, lenders would be required to limit how many high-risk loans they issue across their entire book of business.

Why it matters:

If approved, this could make it easier for some buyers to qualify for larger mortgages, particularly those with strong financials who were previously blocked by the strict stress test.

That said, OSFI is taking a cautious approach. This proposal is still under review, and no changes have been finalized yet. But it’s something to keep a close eye on, especially for buyers trying to navigate an already challenging housing market.

So, what do you think? Smart modernization or risky move?

Either way, if you or someone you know is house-hunting, be sure to stay informed!