What the Changes to CMHC’s Mortgage Requirements Mean for our Homebuyers

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What the Changes to CMHC’s Mortgage Requirements Mean for our Homebuyers – Effective July 1st, 2020

2020-07-01 | 17:28:38

The Canadian Mortgage Housing Corporation (CMHC), announced that it would be making changes to its lending conditions for uninsured residential mortgages in the coming weeks.

Effective July 1, 2020, the following changes will apply to new applications that may impact your borrowing power:

• Homebuyers will need a higher credit score. At least one borrower must have a minimum credit score of 680.
• No borrowed downpayment. Non-traditional sources of down payment like a line of credit or credit card cannot be used.
• Less buying power for homeowners (13-9% reduction in the mortgage money you qualify for). Debt service ratios have been reduced.

For example, a family with a $100,000 income that would typically qualify for a $500,000 condo purchase, now qualifies for only $443,000 maximum mortgage money.

If you need advice on your current mortgage, we are set up to help you online and on the phone, no need to meet in person. Now is a good time for an annual mortgage check-up. Give us a call to get started today.

Good news for Real Estate Buyers: Genworth and Canada Guaranty, the other mortgage insurers in Canada, will not be following CMHC’s update below. So it’s business as usual!