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“In the tug of war between affordability and protecting the banks, as the new stress test rules remind us, the government has come down clearly on the side of the banks,” says Michael Campbell.  Remember the good old days when only insured mortgages were subject to the stress test – as you know, now it’s everybody.  Effective January 1st, 2018 everyone will be subject to the new rule that dictates that anyone applying for a mortgage, even those that require an uninsured (80% LTV or less) mortgage, must qualify under one of the following rules, whichever is higher: (1) as if the rate was 2% higher than the “contract rate” or (2) using the Bank of Canada “Benchmark Rate”.   That is unless they are borrowing from a Credit Union.  In a twist that has not been explained, Credit Union mortgage applicants are not subject to the new stress test rules.  The banks are going to be especially happy with the provision that dictates that those people who are renewing their mortgage will not be subject to the stress test as long as they stay with their current lending institution. However, if they want to transfer their mortgage at renewal to a different lender (i.e. they found a better rate elsewhere), excluding a Credit Union, they will now be subject to the new stress rules, no matter what their LTV is.   Banks will no longer need to match rates with other institutions for existing customers.