“New mortgage stress test rules have borrowers flocking to alternative lenders” via CBC News

Mortgage brokers say the borrower rejection rate from large banks and traditional monoline mortgage lenders has gone up as much as 20 per cent after Canada’s banking regulator imposed a new stress test for home buyers who don’t need mortgage insurance.

As a result, alternative lenders are seeing an uptick in business as brokers increasingly direct home buyers toward borrowing options that are beyond the reach of the Office of the Superintendent of Financial Institutions’ newly enacted tighter lending requirements.

Clients who don’t meet the bar are turning to private lenders, mortgage investment corporations (MICs) and credit unions, which are provincially regulated and not required to implement the stress test, said Carmen Campagnaro, president of Pro Funds Mortgages in Burlington, Ont.

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