The Office of the Superintendent of Financial Institutions proposed a fixed rate of 5.25%, replacing the originally planned benchmark of the weekly median five-year fixed insured rate calculated from mortgage insurance applications, which stakeholders said would be “highly volatile,” it said in a letter sent to lenders seeking their feedback.
The benchmark will be either the greater of a range of rates submitted by lenders plus 200 basis points – the rate already in use – or 5.25%, according to the letter.
The change would drop the use of banks’ advertised rates that tend to be higher than actual market rates to determine the minimum qualifying rate.
Source: Economy - investing.com
