Government Mortgage Rules Set by the Department of Finance- Effective July 9, 2012
June 28, 2012 |
Product Guidelines to Reflect New Mortgage Insurance Parameters
Effective July 9, 2012
Consistent with the new mortgage insurance parameters announced by the Government of Canada on June 21, 2012, CMHC, Genworth and Canada Guaranty will be implementing the following guideline changes effective Monday, July 9, 2012.
- Maximum Amortization Reduced to 25 years
Mortgage loans greater than 80% loan-to-value (LTV) will be subject to a maximum amortization of 25 years (previously 30 years). - Refinance Amount Reduced to Maximum 80% LTV
Reduced to maximum 80% LTV (previously 85% LTV). - Maximum Qualifying Ratios Fixed at 39% GDS and 44% TDS – Where Applicable
When qualifying applicants based on overall strength, a maximum gross debt service (GDS) ratio of 39% and total debt service (TDS) ratio of 44% will not be exceeded, where applicable.Based on credit score, the following maximum GDS and TDS ratios will apply:
Credit Score <680 = 35% GDS / 42% TDS
Credit Score >680 = 39% GDS / 44% TDS - High Ratio Mortgage Insurance Not Eligible for Properties with Purchase Price of $1 Million or Greater
Mortgage loans greater than 80% LTV with a purchase price of $1 million or higher will no longer be eligible for mortgage default insurance.