Mortgage Rule Changes

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Mortgage Rule Changes

The government announced major mortgage rule changes earlier this week. The biggest impact will be on those people wanting to buy with less than 20% down (ie. CMHC insured mortgages).

As it sits currently clients are able to qualify on the rate they are paying if they choose a 5 year fixed (for instance at a rate of 2.44%). Going forward though they will have to qualify as if they are paying the 5 year posted rate which currently sits at 4.64% even though they are not paying this rate. This is going to have a significant negative impact on what clients qualify for when they put less than 20% down.

The bigger question raised is what happens to all of the people who have already written offers and removed subjects on new construction that is scheduled to complete into next year. We are waiting for further word from our lenders on how these will be handles.

For a full list of the changes please take a look at the following article from the Globe and Mail.

If you need any advice regarding your own personal situation please give our office a call anytime.

For more information on our mortgage products please visit our website at

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About the Author:

Alex Kotai
Alex Kotai has worked in the mortgage lending business for over 10 years. His career started at HSBC Bank Canada where he spent most of his time in senior management roles which involved training and managing the sales staff at his branch. After leaving HSBC, Alex decided to open his own mortgage brokerage firm, Your Mortgage Source. Through his company, Alex has access to many lenders across the country with a very expansive list of products.