OSFI Chimes In on Fixed-Payment Variables Again

At TD Securities' annual financial services conference last week, Canada's top bank cop, Peter Routledge, reminded everyone how he's not a fan of fixed-payment variable mortgages.

He told the audience, "We’re making changes to capital requirements that 1) ensure both lenders and mortgage insurers are holding adequate capital for the risks presented by negative amortization, and 2) set incentives for lenders to prevent negative amortizations to begin with. Published October 20th and coming into effect, now in fiscal Q1, 2024."

"Ultimately, these are decisions that will be made at the lender level," Routledge added, and he's right. We recently spoke with a major bank exec on background about OSFI's efforts to discourage fixed-payment variables, which are arguably misguided. He suggested there's little appetite among most banks to do away with these products.

You don't have access to this post on at the moment, but if you upgrade your account you'll be able to see the whole thing, as well as all the other posts in the archive! Subscribing only takes a few seconds and will give you immediate access.

This post is for MLN Pro subscribers only

Subscribe now


Sign in or become a member to read and leave comments.
Just enter your email below to get a log in link.

You've successfully subscribed to
Great! Next, complete checkout for full access to
Welcome back! You've successfully signed in.
Unable to sign you in. Please try again.
Success! Your account is fully activated, you now have access to all content.
Error! Stripe checkout failed.
Success! Your billing info is updated.
Error! Billing info update failed.