The Office of the Superintendent of Financial Institutions (OSFI), which regulates Canada's banking system, sent a letter to federally regulated financial institutions regarding their concerns about household debt, low interest rates, and the rapid home price increases.

The OSFI intends on monitoring:

  • Income verification
  • Non-conforming loans
  • Debt service ratios
  • Appraisals and loan-to-value calculations
  • Institutional risk appetite portfolio risk management

In order to protect borrowers against mortgage debt over extension, the federal government has tightened borrowing rules multiple times since 2008.

Recently, Finance Minister Bill Morneau doubled the minimum down payment for new insured mortgages from 5% to 10% for the portion of a home priced over $500,000.