The bar at which the finances of Canadian mortgage borrowers gets tested has just been lowered, making it easier for would-be home buyers to reach. That's significant because that's the level the so-called stress test is based on. If the borrower failed the test at the higher rate, the lender wasn't allowed to lend to them, even if they wanted to. At the new stress test level, that same borrower would be approved for a loan on a home costing up to $531,230. Ottawa had planned to change the way the stress test was calculated to begin with, announcing in February a plan to tinker with the formula starting in April.

Source: CBC News August 13, 2020 14:26 UTC