Quote:
Originally Posted by Kavvy
Sorry I read the thread, but still confused.
If you have 25% down, are we saying that most big banks will require CMCH insurance?
40% down?
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Basically it is just harder to qualify for Insured mortgages. Down payment requirements haven't changed.
Quote:
Originally Posted by llwhiteoutll
No, you'd still be CMHC exempt. The lender can always choose to insure 20%+ DP mortgages.
At least this is what was explained to me
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That's right, a lender must insure purchases with less than 20% down payments. But if they want, they can insure mortgages even when more than 20% is put down.
The main change being discussed is that when qualifying for a mortgage with less than 20% down, a benchmark rate will be used for qualifying purposes. The current benchmark rate used for variable mortgage qualification is 4.64. This is around 2% higher than a current 5 year fixed rate, meaning that qualifying will be more difficult.
The idea is that new buyers will be less susceptible to rate increases as there is currently a great deal of concern that any rate hikes could mean financial hardship or worse for a lot of Canadians.