More debt not the answer: Watchdog says contentious mortgage stress test is safety buffer for banks and borrowers

The mortgage stress test mortgages has come under fire from critics who claim the measure is making it harder for Canadians to own a home.AP Photo/Keith Srakocic

A federal banking regulator defended on Tuesday a stress test for uninsured mortgages that has been criticized for making it harder than it should be for some Canadians to own a home.

“The stress test is, quite simply, a safety buffer that ensures a borrower doesn’t stretch their borrowing capacity to its maximum, and leave no room to absorb unforeseen events,” said Carolyn Rogers, assistant superintendent at the Office of the Superintendent of Financial Institutions.

“This is simply prudent. It’s prudent for the bank and it’s prudent for the borrower.”

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