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July 2020 - New CMHC mortgage insurance rules

Blog by Diane Cardoso | July 24th, 2020

On July 1, 2020, The Canada Mortgage and Housing Insurance Corporation (CMHC) has made changes the mortgage insurance the provide to qualifying Buyers with less than 20% down payment:
Income to Debt ratios have been reduced as noted below, and these amounts may now affect your qualifiying levels:
a) Gross Dept Servicing from 39% to 35%
b) Total Dept servicing ratio from 44% to 42%
and 
c) the Minimum Credit score is being increased from 600 to 680

Non traditional sources of down payment which will increase indebtedness will no longer be treated as equity for insurance purposes (eg: using a secured line of credit for a down payment).

The Good News is that Genworth and Canada Guaranty insurance companies have announced that they do not plan to change their underwriting rules on mortgages.

Check in with your Mortgage Broker to see how this might impact you and your down payment.