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MillerTime GFG · 10-03-2016, 01:28 PM

Was going to post this in my Mortgage Broker (CP power ring) thread, but the changes are quite significant so I wanted to post it here as well.

What a crazy day this has turned out to be. First off, my brokerage (Invis-Mortgage Intelligence) merges with Mortgage Alliance to become the largest full-service brokerage in Canada, and then this news:

http://www.theglobeandmail.com/news/...ticle32206297/

I'm going to stick to mainly the points more related to CP, as the other portion is to do with foreign ownership.

- All insured mortgages will now need to be qualified at the Bank of Canada benchmark rate, which is currently 4.64%. Previously, any fixed term 5 years or longer would be qualified at your actual contract rate, and only variable or fixed terms less than 5 years needed to use the benchmark rate. This will have major impacts on what people can qualify for.
- Bulk-insured/portfolio insured mortgages (>20%) down will require the same as the above. A lot of lenders do bulk-insure their mortgages even at >20% down, so this too will have a significant impact.
- Max amortization on any insured mortgages will be 25 years, even if >20% down.

This goes into effect October 17th, so if you're needing to utilize the current regulations, you will want to get your application in quickly.

Update:

There is still some uncertainty as to exactly how a 5-year fixed will be calculated, as it may not be the Bank of Canada benchmark rate. They may create a new benchmark rate just for fixed rates for qualifying. Otherwise, this would lead to a huge spike in variable rate mortgages, which they wouldn't want to see.

Also heard from a couple of my reps at the big banks that they will 'most likely' follow suit with the new regulations for >20% down, even though they don't bulk-insure.

Thoughts?

10-03-2016, 01:28 PM	#1
MillerTime GFG First Line Centre Join Date: Feb 2010 Location: Mckenzie Towne Exp:	Major Changes in Mortgage Qualifying Was going to post this in my Mortgage Broker (CP power ring) thread, but the changes are quite significant so I wanted to post it here as well. What a crazy day this has turned out to be. First off, my brokerage (Invis-Mortgage Intelligence) merges with Mortgage Alliance to become the largest full-service brokerage in Canada, and then this news: http://www.theglobeandmail.com/news/...ticle32206297/ I'm going to stick to mainly the points more related to CP, as the other portion is to do with foreign ownership. - All insured mortgages will now need to be qualified at the Bank of Canada benchmark rate, which is currently 4.64%. Previously, any fixed term 5 years or longer would be qualified at your actual contract rate, and only variable or fixed terms less than 5 years needed to use the benchmark rate. This will have major impacts on what people can qualify for. - Bulk-insured/portfolio insured mortgages (>20%) down will require the same as the above. A lot of lenders do bulk-insure their mortgages even at >20% down, so this too will have a significant impact. - Max amortization on any insured mortgages will be 25 years, even if >20% down. This goes into effect October 17th, so if you're needing to utilize the current regulations, you will want to get your application in quickly. Update: There is still some uncertainty as to exactly how a 5-year fixed will be calculated, as it may not be the Bank of Canada benchmark rate. They may create a new benchmark rate just for fixed rates for qualifying. Otherwise, this would lead to a huge spike in variable rate mortgages, which they wouldn't want to see. Also heard from a couple of my reps at the big banks that they will 'most likely' follow suit with the new regulations for >20% down, even though they don't bulk-insure. Thoughts? Last edited by MillerTime GFG; 10-03-2016 at 03:13 PM.