Major changes in mortgage qualifying! (Posted in OT forum 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.
Thoughts?