![\"\"](\"https:\/\/www.livabl.com\/articles\/wp-content\/uploads\/2018\/07\/stress-MPC.jpg\")
<\/a><\/p>\nPhoto: James Bombales<\/em><\/p>\n Instead of safeguarding Canada\u2019s financial system, one association says the mortgage stress test is unduly suppressing housing activity, which could spell future trouble for the economy. <\/span><\/p>\n Since the new mortgage stress test was implemented on January 1, roughly 18 per cent of prospective homebuyers were unable to buy their preferred home, according to a new report from Mortgage Professionals Canada (MPC), published Wednesday.<\/span><\/p>\n\n \u201cI think there’s no question that there’s a significant number of folks who have been disqualified from purchasing a home,\u201d Paul Taylor, president and CEO of Mortgage Professionals Canada tells Livabl.<\/span><\/p>\n \u201cThe stress test effectively reduces everybody’s borrowing ability. It also stifled an awful lot of what would be sort of move-up buyers,\u201d he adds.<\/span><\/p>\n The semi-annual report uses consumer surveys to provide insight on the housing and mortgage market in Canada.<\/p>\n The stress test was implemented by the Office of the Superintendent for Financial Institutions (OSFI) and requires all uninsured mortgage borrowers to qualify against the Bank of Canada\u2019s five-year benchmark rate, or at their contract rate plus an additional two per cent. This policy follows a similar stress test introduced in 2016 for insured mortgages. <\/span><\/p>\n Since January, home sales have fallen across Canada, as consumers wait on the sidelines to see the impact of the stress test and increasing interest rates.<\/span><\/p>\n