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The AC Lending Weekly

Big Changes in Canada Mortgage Rules Oct 2016

Well its that time of the year again, no I’m not talking about the start of the NHL season or all the hit new TV’s shows-it’s Mortgage Rule Changing time, except this is not as fun as the other two things and this one does effect the possibility of you purchasing a home or not……So what changed well a few things but the one that will effect you the most is:

As of October 17th, 2016 all insured mortgages, regardless of term or type, will be required to qualify at the bank of Canada posted rate.

To put that in perspective.

Family Income $80,000

Monthly Debts $500

Property Taxes $3,500

25 year term

(Qualification rate today is 2.39% and after will be 4.64%)

Today that family can buy a home worth approx. $393,000 but after the 17th that drops to $310,000. That is a large decrease to say the least.

The rate you pay will not change, just the interest rate we have to use to qualify you for the loan.

Safer Lending

Mortgages with a loan to value of less than 80% were not subject to the same stringent rules as those with less than 20% equity. As of November 30th, 2016 that will change and mortgages will all be subject to the same lending criteria.

I cannot stress enough the necessity of making sure you speak to a well-qualified mortgage professional before you make any decisions about buying or selling in case you are one of the folks affected by these changes. I will keep you up to date on any changes that come down the road. As always any questions as always feel free to contact me anytime (403) 831-7869


Alim Charania

Mortgage Expert

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