The Globe and Mail reports in its Saturday edition that the Office of the Superintendent of Financial Institutions has introduced new rules to limit the number of highly leveraged loans in lenders' residential mortgage portfolios. The Globe's Stefanie Marotta writes that the OSFI has instructed banks to restrict the number of mortgages that exceed 4.5 times the borrower's annual income. The regulator believes that high household debt poses a risk to the safety and soundness of banks and the stability of the financial system. The OSFI's LTI framework aims to prevent a similar build-up of loans given to highly leveraged and indebted borrowers in the future. Residential mortgage portfolios have grown significantly as interest rates and prices have risen, making Canadian homeowners among the most highly indebted globally. The new income cap is in addition to existing mortgage qualification rules, such as the federal stress test, which requires borrowers to be able to pay their mortgages if interest rates are two percentage points higher than the negotiated rate. The measure applies to new mortgages in the bank's overall portfolio, not to individual borrowers. By comparison, the stress test is applied to the borrower.