Category Archives: General

Could the new mortgage rules be costing you $15,000?

Could the new mortgage rules be costing you $15,000?

In November of 2016 the government introduced changes to the rules for what mortgages would qualify for the government backed mortgage insurance programs. The new criteria for mortgages to be insured will includes the following requirements:

A loan whose purpose includes the purchase of a property or subsequent renewal of such a loan;
A maximum amortization length of 25 years;
A property value below $1,000,000;
For variable-rate loans that allow fluctuations in the amortization period, loan payments that are recalculated at least once every five years to conform to the established amortization schedule;
A minimum credit score of 600;
A maximum Gross Debt Service ratio of 39 per cent and a maximum Total Debt Service ratio of 44 per cent, calculated by applying the greater of the mortgage contract rate or the Bank of Canada conventional five-year fixed posted rate; and,
If the property is a single unit, it will be owner-occupied.
If your mortgage does not meet these guidelines the lender can no longer insure the mortgage. This will have the biggest impact on anyone who is looking to refinance their mortgage to access the equity in their home.

Why is this important?

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TFSA, RRSP, or get rid of your mortgage?

One of my goals as a mortgage planner is to help you integrate your mortgage into your overall financial plan. And with RRSP season moving into full swing, now is a good time to think about some of your long-term plans and how best to put yourself in a position to have a great retirement.

There is no one size fits all answer when it comes to a financial plan, and as with most things, we have a choice of going the DIY route or finding a financial planner that can help you with your plan. I am not a financial planner, but I would like to pass on to you some of the information I have come across in my personal search while building my own financial plan.

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