We are 2 weeks into the new B20 mortgage rules. While I am sure we will see further changes as time goes along, here is what we have seen thus far…
• New mortgages with less than 20% down are still qualified using the mortgage qualification rate ( 5.19%) and a 25 yr amortization
• New mortgages with more than 20% down are qualified at 2% above actual rate and a 30 year amortization
• Existing mortgages coming due that were put in place BEFORE October 2016 are grandfathered as long as the loan amount is not altered. Borrowers can get insured rates from a new lender if they transfer their mortgage. This is important as you may be offered a higher rate by the existing lender than what you could get elsewhere if you TRANSFER your mortgage at maturity. The value of the home at the time of your last mortgage must be no greater than $1M.
• Basement suite rental income has changed from an offset of rental to using a maximum of 100% added to the borrowers’ income. Unless, they have 2 or more properties. Credit unions may still offer an offset on a case by case basis. Ask us if it will apply in your case.