Uniform rules for all insured mortgages
Starting on October 17, 2016, all new mortgage borrowers with a down payment of less
than 20% and seeking mortgage insurance (high-ratio mortgages) will be required to
qualify at the posted rate for a conventional mortgage for a five-year term (presently
4.64%) or the contract rate, whichever is higher. Currently, this qualifying requirement
is imposed only on insured mortgages with a variable rate or a fixed rate with a term of
less than five years. Moreover, effective November 30, 2016, the standards for low-ratio
mortgage portfolio insurance will be same as those for insured high-ratio mortgages.
This means that mortgages in a portfolio to be insured will be restricted to 25 year in
length of amortization, a maximum of $1,000,000 in value, a credit score of 600 or
higher, and a maximum Gross Debt Service of 39% and Total Debt Service of 44%
calculated with the posted rate for a five-year conventional rate or the contract rate,
which ever is higher.
To view, print and download the new report, click on the following link: