As of July 1, the Government is about to make qualifying and getting a mortgage a little
harder if you are putting less than 20% down and your mortgage is insured with CMHC.
Their reasoning is that COVID has affected all sectors from housing, job loss and
So in order to “protect” future home buyers and reduce risk, CMHC, the Government
mortgage insurance entity has announced the following changes:
- The debt servicing for high ratio mortgages (less than 20% down payment)
will be reduced from 39/44 to 35/42;
- The qualifying credit score will be a minimum of 680 for at least one of the
- You will no longer be able to use ‘borrowed’ funds for your down payment,
such as a line of credit.
For illustration purposes only, assuming both applicants have a credit score of 680 or
Annual income: $130,000
Other monthly debts: $ 950
Annual property taxes: $ 3,000
Pre-July 1 mortgage: $599,567
After July 1 mortgage: $562,095 ($37,472 less)
As yet, we do not know if the other 2 mortgage insurers (Genworth and Canada
Guarantee) are going to follow these new guidelines. But if not, they will be scrutinizing applications closer.
Have questions, call or text 403.660.1169 or email email@example.com