Canada's OSFI plans to limit banks' mortgages to highly indebted borrowers with a 4.5x income (LTI) ratio cap.
Canada's banking regulator, OSFI, plans to limit banks' mortgages to highly indebted borrowers, setting a 4.5 times income (LTI) ratio cap on mortgage loans. The measure aims to reduce the risk of borrowers defaulting on their loans and will apply to bank portfolios, not individual borrowers. Each bank's portion that can exceed this limit will be determined individually. The new limit is expected to be implemented by the end of each institution's fiscal first quarter of 2025.
April 12, 2024
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