Tag Archive: mortgage rules


Could CMHC Close This Stress Test Loophole?

It’s no secret. Many homebuyers that had no trouble qualifying for a mortgage in 2017 are finding big challenges in 2019. As we wrote yesterday, the government’s harsher mortgage “stress test” is a key reason why. The problem is exacerbated by the banks’ refusal to lower their posted 5-year fixed rates, despite a 55-basis-point drop in the 5-year bond yield...

It’s Time to Rethink the Stress Test: CIBC

“You usually need to be in a recession to see household credit rising this slowly.”—Ben Tal, CIBC Here’s something everyone in the mortgage industry already knew, and CIBC just re-confirmed. The government’s mortgage stress tests have caused most of Canada’s lending slowdown since 2017. That’s the conclusion of CIBC Economics. As a result, the bank’s widely-respected econo-wizard Benjamin Tal concludes, “…Regulators should...

First-Time Home Buyer Incentive Fail

Summary: The CMHC Shared Equity Mortgage comes up short, based on the info the government has graced us with thus far. Some of these projections may change, however, as the government releases more information on the programs. OK, someone please tell us our numbers¹ are wrong, because from where we sit the First-Time Home Buyer Incentive (FTHBI) just announced by...

Are 30-year Insured Amortizations Coming Back?

The Department of Finance is considering a return to 30-year amortizations on insured mortgages, says the Canadian Homebuilders’ Association (as reported in the Globe and Mail). The last time we had 30-year amortizations on insured mortgages was 2012. This time, however, only first-time buyers might get access to them. Called “extended amortizations,” 30-year payback periods are still available to anyone getting an...

Could Ottawa Up the Default Insurance Limit?

If we were betting types, we’d wager that in coming months the government makes it possible to mortgage a 7-figure property with just a modest down payment. Here’s why. At the moment, there is a $1 million property value limit if you want to buy a house with less than 20% down and get the best mortgage rates. That price...

Ottawa Considering a Mortgage Stress Test for Private Lenders: Reuters

Imagine if 250,000 to 350,000+ homeowners couldn’t get cost-competitive private mortgages anymore. That’s the potential result if the feds impose a mortgage stress test on private borrowers. And they’re considering just that, according to a Reuters report today. At this point there are more questions than answers, like does this apply just to mortgage investment corporations (MICs) or to all...

Relaxed Mortgage Rules in 2019?

Those who think the government went overboard on mortgage tightening may have a glimmer of hope. In a presentation Wednesday, Stuart Levings, head of Canada’s largest private default insurer, Genworth Canada, said the company will be urging policy-makers to improve housing access, particularly for younger homeowners. “The only reason we think there’s an opportunity is because it’s an election year,”...

New Bank of Canada Data on Mortgage Risk

Stricter mortgage rules are working, suggests the Bank of Canada in this report today. Now if only we could take that report at face value. New Stats on Mortgagor Debt Loads If the government wanted to slow the market, it did. As of the second quarter, the number of new low-ratio mortgages fell 15% year-over-year after the feds implemented the...

Got a HELOC? Your Mortgage Options Are About to Shrink

For more than a year we’ve speculated that new rules will be adopted, making it tougher to qualify for a HELOC. How could they not? The Bank of Canada, OSFI, CMHC and FCAC have all been warning about HELOC risk for months. And when multiple government agencies target a financial product, change is a’comin. And now it’s here. Banks are...

CMHC Makes Life Easier for Self-Employed Borrowers

Roughly 1 in 6 Canadians work for themselves and CMHC wants to help them get a mortgage. Most notably, the nation’s largest default insurer is allowing lenders more flexibility when approving borrowers with less than two years of self-employment income. If you’re in business for yourself and getting a default-insured mortgage, CMHC has announced the following changes that may help...