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NEW 2020 Canadian Mortgage Rules 

No Need To Panic Over New Mortgage Rules

No one has a crystal ball to see what the next few months - or years - will bring, but it’s likely that some Canadians will have trouble with their debt in the wake of COVID-19. With that possibility in mind, the Canadian Mortgage and Housing Corporation (CMHC) recently announced that it is tightening the rules for Canadian homebuyers looking for insured mortgages. Homebuyers with less than 20% downpayment require mortgage default insurance: an important protection for Canadian lenders. 


Summary of the new CMHC rules (effective July 1):

  1. Reduced buying power - Previously, CMHC allowed 44% of total income to service all your debt and up to 39% of total monthly income to service housing payments (principal, interest, taxes, heat, condo fees). They have now tightened this back to 42% of total income can now go to service all your debt, and 35% of total monthly income to service housing costs. This reduces a homebuyer’s purchasing power by anywhere from 9 to 11%. As an example, someone qualifying for a $500,000 home now, will see that decrease to approximately $445,000. 

  2. Higher minimum credit score - At least one applicant’s credit score must now be a minimum of 680, up from 600. Find out your own score - free - through Equifax or TransUnion.

  3. Downpayment funds can no longer include most borrowed down payment sources - Very few buyers used this option so this will have a minimal impact. 


Alternative Mortgage Options Available

This is a great time to work with a mortgage broker!

We work with dozens of lenders… and private mortgage insurers – Genworth Canada and Canada Guaranty - that are an alternative to CMHC. Neither have announced new underwriting guidelines, which means we expect to be guiding many new homebuyers through these alternate insurance channels.


Contact The House Team Anytime

Having trouble keeping up with all the changes lately? That’s why we are here. Our focus is mortgages and we are always up to date on the changing mortgage marketplace. If you, or someone you know, is looking to buy this year, it’s important to get in touch early so we can put a solid plan in place.

If you have concerns about your current mortgage strategy, let’s talk, especially if you want to find out if you can renegotiate your mortgage to take advantage of today’s low rates, or refinance to consolidate troubling high-interest debt. 

Wondering If You Can Still Get a Mortgage Right Now? We want you to know that you have options available and that we can help direct you towards the best possible mortgage rate.

Fill out the form below and we will begin putting a solid plan in place for your mortgage needs this year!


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