Mortgage Rules Tighten

Insured Mortgage Rules Change

Mortgage rules are changing, effective July 1, 2020, making it harder to qualify for a CMHC insured mortgage. CMHC just announced that they’re tightening the qualifying rules substantially, reducing buying power once again on mortgages with less than 20% down payment. -Limiting the Gross/Total Debt Servicing (GDS/TDS) ratios to the standard 35/42 (currently 39/44) -A […]

Deferred Mortgage Payments

Deferred Mortgage Payments

The temporary suspension of mortgage payments is known as a mortgage deferral. Deferred mortgage payments provide short-term relief when experiencing financial hardship. Your lender needs to approve the request to defer mortgage payments. Once approved, you’re permitted to stop making payments on your mortgage temporarily. Do not worry about late charges (in most cases) or […]

Benchmark Rate More Dynamic

Benchmark Rate

Finance Minister, Bill Morneau, announced changes to the benchmark rate that will come into effect on April 6, 2020. This is the rate a consumer has to qualify at for an insured mortgage, also known as the “Mortgage Stress Test.” The new benchmark rate will be the weekly median 5-year fixed insured mortgage rate from […]

GDS and TDS Calculations

Total Debt Service

Learn how mortgage lenders calculate your debt service ratios, GDS and TDS. You need to know these two basic calculations so you can crunch the numbers to find out what your budget and affordability is. Gross Debt Service (GDS) Lending guidelines allow you to use up to 32% of your gross monthly income towards housing […]

Mortgage Stress Test

Mortgage Stress Test

The “stress test” rule can be a little complicated to understand. Here’s a break down of why the rule exists and how it will apply to your mortgage. What does the mortgage “stress test” really mean when applying for a mortgage? When you buy a home in Canada your mortgage is “stress tested” to ensure […]

New Conventional Mortgage “Stress Test” Rules

New "Stress Test" Mortgage Rules

The decision has been made by the Office of Superintendent of Financial Institutions (OSFI) to proceed with the mortgage rules they proposed earlier this summer. OSFI is an independent agency of the Government of Canada that reports to the Minister of Finance. It was created to contribute to public confidence in the Canadian financial system. OSFI is the sole regulator of […]

Breaking Down the 5 C’s of Credit

The 5 C's of credit will help determine if you can get a mortgage

To qualify for a mortgage, a borrower needs to meet specific criteria known as the five C’s of credit. This process weighs five characteristics of a borrower and tries to evaluate the likelihood of default on a mortgage loan. The five C’s of credit are capacity, capital, collateral, credit history, and character. Capacity measures a borrower’s ability to make […]

Home Buyers’ Plan for First-Time Home Buyers

Home Buyer's Plan

Saving for a down payment is a challenge for many first-time home buyers. It can be the only hurdle standing in the way of homeownership. The Government of Canada acknowledged the difficulty first-time home buyers were facing and established the Home Buyers’ Plan (HBP). The Home Buyers’ Plan allows first-time home buyers, people who have […]

Mortgage “Stress Test” Tips

New Mortgage Rule Tips

The mortgage “stress test” rule is now in effect. Canadians applying for a default insured mortgage are required to qualify at the Bank of Canada’s five year posted interest rate (the benchmark qualifying rate) on all mortgage terms. The qualifying mortgage payment is based on this higher rate. This directly results in lower mortgage amounts. […]

New Mortgage Rules Coming to Canada Soon

New Qualifying Mortgage Rules

The Government of Canada announced new mortgage rules that will be coming into effect on October 17, 2016. The rules will directly impact those purchasing a home in Canada with less than a twenty percent down payment. Canadians applying for a default insured mortgage (high-ratio mortgage) will be required to qualify at the Bank of […]