The federal government is lowering the benchmark for insured mortgage stress tests.
Finance Minister Bill Morneau announced the minimum qualifying rate will be set at the weekly median five-year fixed insured rate plus two percent or the borrower's contract rate, whichever is higher.
Previously the benchmark had been set at either the customer's contract mortgage rate or the Bank of Canada's five-year fixed posted rate.
Experts say the Bank of Canada's rate has been quite high for some time.
The change will come into effect on April 6th and only impact insured mortgages for now.
Insured mortgages are required if a buyer cannot pony up a 20 percent down payment on a home.