We’ll be adding more questions to this page over time. Check back often!

Q: Do Credit Unions still require the stress test?

A: Credit Unions are provincially regulated and banks and other financial institutions are federally regulated. The stress test is a federal regulation. So, legally, Credit Unions do not have to follow the stress test.

However, most credit unions are now using the stress test for two reasons:

  1. They can back-end insure their mortgage and sell them off if their mortgages are stress tested. What this means is that they can “churn” their mortgage book and make more money on many more mortgages.
  2. The number of mortgage files that Credit Unions were getting that would not pass the stress test increased dramatically. These files are supposedly more risky due to higher debt to income ratios, which is not something the Credit Unions want.

However, Blueshore and Westminster are still allowing us to submit files without a stress test or without a full stress test. Rates are slightly higher at around 0.2% more than regular mortgages, but that are a steal when compared to higher rate “B” lenders.