The new rules affecting low ratio mortgages or mortgages backed by portfolio insurance are effective from November 30th, 2016.
The following are new mortgage rules for low ratio mortgages, (Over 20% down payment = low ratio mortgage)
The new refinancing rules have been postponed to start taking effect on May 1, 2017,
New eligibility requirements for low-ratio mortgages to be insured will include:
A loan whose purpose includes the purchase of a property or subsequent
renewal of such a loan;
A maximum amortization length of 25 years;
A maximum property purchase price below $1,000,000 at the time the loan
For variable-rate loans that allow fluctuations in the amortization period,
loan payments that are recalculated at least once every five years to
conform to the original amortization schedule;
A minimum credit score of 600 at the time the loan is approved;
A maximum Gross Debt Service ratio of 39% and a maximum Total
Debt Service ratio of 44% at the time the loan is approved,
calculated by applying the greater of the mortgage contract rate or the Bank
of Canada conventional five-year fixed posted rate; and,
A property that will be owner-occupied.
A benchmark test rate will be applied to qualify.
A $500,000.00 mortgage at an annual benchmark rate of 4.64% (This is a test rate) on a 25 years amortization will require a monthly payment of $2,806.41
A $500,000.00 mortgage at an annual contracted rate of 2.39% on a 25 years amortization will require a monthly payment of $2,212.53. (This would be the real payments)
What should you do at this moment?
There is no one single financial move as each borrower has different needs and different circumstances, however with you should apply on line now or call or text 416-262-7139and request a confidential one on one meeting to look at specific answers and help you get the best mortgage deal. Delays to take action may cost you! Don’t delay!
B2B Bank’s Equity 50 program is great for individuals that have a hard time proving income in the traditional sources. Clients can access up to 50% of their home value on a first mortgage or refinance the current mortgage.
This program has proven to be especially popular with those in pension, and other people whose income does not meet their banks requirements of affordability, self-employed people whose notice of assessment income is not enough and part-time employees.
The B2B Bank’s Equity 50 program offers very flexible ratios requirements that are derived from a low-income period suffered by the family, easing the way out when families struggle to meet their current mortgage payments with their current lender.
If you are currently in a similar position as described above, you may consider the B2B Bank’s Equity 50 program as an alternative to refinance and consolidate your debts and better your current cash flow that may help you get back on your feet sooner rather than later.
Let me help you with your mortgage!
Clients can be self-employed, be on fixed income (such as pensions), or simply have limited income reported to CRA
400,000 Maximum loan amount
The client must have a domestic (Canadian) source of income
The non owner occupied rental mortgage loans help you qualify by adding the monthly rental income to your current income. As a result you are able to purchase or refinance a rented property and let the property pay for itself with the rent
Scenario: You currently have a steady job or business, a decent credit score, some savings but no time to start another business or job, and you would like to earn residual income from a real estate property.
The non-owner occupied rental mortgage is designed for those who would like to become real estate investors.