The Canada Mortgage and Housing Corporation is defending the mortgage stress test amid calls for the measure to be changed.
CMHC president Evan Siddall says in a letter to the parliamentary standing committee on finance that the new measure is working as intended to lower house prices and protect Canadians from borrowing too much money.
He says changes in stress-test requirements starting in 2010 have helped keep house prices 3.4 per cent lower nationally than where they otherwise would have been.
The Office of the Superintendent of Financial Institutions amended the B-20 rule starting January, 2018, to include uninsured mortgages or those with a down payment of more than 20 per cent.
The rule stipulates would-be borrowers must still be able to make payments if faced with higher interest rates or less income.
Some groups and economists have called for changes to the B-20 as property sales and house prices fall across Canada.