The global economy continues to recover from the effects of the COVID-19 pandemic. The Bank is continuing its reinvestment phase, keeping its overall holdings of Government of Canada bonds roughly constant. The Banks extraordinary forward guidance on the path for the overnight rate is being maintained. The Bank of Canada today held its target for the overnight rate at the effective lower bound of percent, with the Bank Rate at percent and the deposit rate at percent. Throughout the year, we will continue to monitor the appropriateness of the minimum qualifying rate and will make further adjustments, if conditions warrant. OSFI reviews and communicates the minimum qualifying rate at least every December. Ensuring that borrowers can continue to repay their mortgage loans strongly contributes to the safety and soundness of Canadas financial system. Mortgages are typically one of the largest exposures that banks carry on their balance sheets. This environment supports todays decision to maintain the current minimum qualifying rate. In an environment characterized by increased household indebtedness and low interest rates, it is essential that lenders test their borrowers to ensure that mortgages can continue to be paid during more adverse conditions. The Office of the Superintendent of Financial Institutions (OSFI) confirmed that the minimum qualifying rate for uninsured mortgages will remain the greater of the mortgage contract rate plus 2 percent or 5.25 percent.
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