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New Tighter Mortgage Insurance Lending Rules July 9,2012

Effective July 9, 2012, the Federal Ministers announcement of Canada’s mortgage insurance lending rules.


Key changes:


  • Reducing the maximum amortization period for high ratio insured mortgages to 25 years from 30 years
  • Lowering the maximum amount Canadians can borrow when refinancing using insured mortgages to 80 per cent from 85 per cent of the value of their homes
  • Reducing total debt service (TDS) ratio for high ratio insured mortgages to 44 per cent (previously 45%)
  • Limiting the availability of government-backed insured mortgages to homes with a purchase price of less than $1 million

All new high ratio approvals with 30 year amortization approved between June 24 and July 9 2012 with the exception of Capped Projects  must fund by December 31, 2012.


An application must have been approved by CMHC or Genworth prior to July 9, 2012 so the application must be a live deal with an offer in place.


Pre approvals done prior to July 9, 2012 and do not have an offer in place must be looked at again by the lender using the 25 year AM.


These key changes apply to high ratio financing only. If you have 20% down payment or greater, then you can still qualify for a 30 year amortization.


Click here for the Department of Finance Canada Press Release

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