B-20

B-20 is the rulebook behind most of what you experience at a bank or federally regulated lender. It expects lenders to verify income and employment, confirm the source of the down payment, assess debt-service ratios, appraise the property prudently, and qualify uninsured borrowers at a minimum qualifying rate (MQR) rather than the contract rate.

Key numbers under B-20: the uninsured MQR is the greater of your contract rate + 2% or 5.25%; the maximum loan-to-value for a conventional (uninsured) mortgage is 80%; and a HELOC's revolving portion is limited to 65% loan-to-value, within the 80% combined limit. Insured mortgages follow parallel federal rules set by the Department of Finance.

Since November 21, 2024, OSFI no longer expects lenders to apply the MQR to an uninsured straight switch at renewal (same balance, no longer amortization). The lender still underwrites the switch as a new loan.

B-20 binds federally regulated lenders only. Provincially regulated credit unions and private lenders are not directly bound by it, which is one reason an alternative lender can sometimes approve a file a large bank declines on the same numbers. If you are close to your borrowing ceiling, a broker can model your file against both before you firm up an offer.