Canada is considering subjecting private lenders to the same mortgage stress test rules faced by banks to prevent housing markets from being destabilized by the lenders’ rapid growth, three sources with direct knowledge of the matter said.

Private lenders currently account for approximately one-tenth of Canada’s $1.5 trillion mortgage market, and are still dwarfed by banks but their growth has accelerated since the new rules have been introduced. The B-20 rules that were introduced last January require banks to test the borrower’s ability to make repayments at 200 basist points above their contracted rate, and have resulted in more applications for loans being rejected.

As of now, private lenders are not subject to the B-20 rules because they are supervised by provincial regulations rather than the Office of the Superintendent of Financial Institutions, the federal regulator. Bringing them under federal supervision would require a change in the law.

Two options were discussed, either the federal government would have to ask provinces to apply the B-20 guidelines themselves, private lenders would then also need to provide stress tests the same as the banks’, or the less severe alternative – to recommend provinces ensure private lenders run tighter checks on the ability of their borrowers to repay loans but stop short of imposing the actual stress test. A final decision has yet to be made.

Mortgage investment companies (MICs), have been the main driver of private lenders’ growth, picking up borrowers spurned by the banks. Lending up to 90 per cent of a property’s value, they typically charge borrowers an annual rate above 10 percent, sometimes as high as 15-20 compared with the 3-5 percent offered by banks.

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After years of booming times, Canada’s housing markets are at a turning point. Interest rates are rising, and the new mortgage rules have taken some steam out of the market.

Below are 10 charts illustrating just how out of whack things have become.

Canadians have never had to shell out more of their income to own a home:

Condo construction is at an all-time high:

Young families are not wanting to live in said condos:

You need to be a one-percenter to own an “average” Vancouver home:

Vancouver homes are comically overpriced:

Vancouver’s new distinction: Worst housing market:

There aren’t enough new residents to prop up Vancouver’s market:

Toronto has as much as it can handle:

Mortgage growth is at historic lows:

Investment condos are now often losing money:

Finance Minister Bill Morneau gave a speech in Aurora, Ont., where he asked if Ottawa has any plans to help first time-buyers. Morneau said the Trudeau government is looking for ways to make home-buying more affordable first-time buyers.

Housing is expected to be a prominent campaign issue ahead in October’s federal election. The Liberal government has focused on three housing-related issues: Canada’s shortage of affordable housing, a run-up in real estate prices and ensuring millenials can afford homes.

He stated that the Federal government has already taken steps to increase the supply of affordable housing and to cool the hottest markets by introducing stress tests that limit some people’s ability to take out big mortgages.

According to the Toronto Real Estate Board, the average price for all types of housing there was $810,000 in December. Detached homes were going for more than $918,000. Conservative MP Karen Vecchio argued in a statement Tuesday that Trudeau government policies, including it’s carbon tax, have made housing less affordable.

NDP Leader Jagmeet Singh proposed measures he insisted will help build 500,000 new affordable housing units across Canada over the next 10 years. He said Ottawa should stop applying GST to the cost of building new affordable units, provide a subsidy to renters who spend more than 30 per cent of their incomes on housing and double a tax credit for first-time home-buyers from $750 to $1,500.

In 2015, Liberals promised to enhance the popular Home Buyer’s Plan which enables first-time buyers to borrow up to $25,000 tax-free from their registered retirement savings to purchase a new home. The amount musst be repaid within 15 years. And in 2017, they unveiled a 10-year, $40-billion national housing strategy which the government has billed as a plan that will provide more social housing and affordable renting units.

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