CMHC Changes to Uninsured Mortgages

Changes are coming from CMHC, effective July 1, 2020, that will affect future Homebuyers who are putting down less than 20% for a down payment.

COVID-19  has exposed long-standing vulnerabilities in our financial markets, and CMHC is implementing 3 new rules to protect the economic futures of Canadians. 

The following changes will apply for new applications for homeowner transactions and portfolio mortgage insurance:

    • Limiting the Gross/Total Debt Servicing (GDS/TDS) ratios to our standard requirements of 35/42; This will negatively affect buying for those with less than 20% down, resulting in the possibility of reduction of their max buying power by up to 12%
    • Establish a minimum credit score of 680 for at least one borrower; which is increasing from the current minimum of 640 
    • Non-traditional sources of down payment that increase indebtedness will no longer be treated as equity for insurance purposes. No borrowed down payments (flex down mortgage), non-traditional sources of down payments, such as unsecured personal loans or unsecured lines of credit, as equity for insurance purposes.



Buyer with 100K income (no debts or monthly liabilities)

Before July 1st 

Pre-approved today for $530K with 10% down payment

After July 1st

Pre-approved goes to approximately $470K with 10% down

This is a drop of 12% in buying power!

For any of your mortgage questions, contact James Harrison james@mortgages.ca or visit mortgages.ca for more information! 

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