Want to know more about the new mortgage rules in Canada?
With Canada’s new mortgage rules in effect as of January 1, 2018, we want to help you understand how these new rules may affect you. With the new rules, all borrowing solutions secured by real estate are now subject to stricter borrowing qualifying criteria, to ensure that you would be able to afford principal and interest payments if interest rates increase.
Here’s what you need to know:
For home buyers with an uninsured residential mortgage (for example, most mortgages where the borrower’s down payment is 20% of the property value or more), the rate that the lender is required to use when qualifying a client is the greater of the client mortgage rate plus 2% or the Bank of Canada’s 5-year conventional mortgage interest rate.
For home buyers with an insured residential mortgage (for example, where the borrower’s down payment is less than 20% of the property value), the rate that the lender is required to use when qualifying a client is the greater of the client mortgage rate or the Bank of Canada’s 5-year conventional mortgage interest rate.
For secured lines of credit, the rate used to qualify borrowers will now be the greater of the line of credit contract rate plus 2% or the Bank of Canada’s 5-year conventional mortgage interest rate.
The new rules don’t apply if you are renewing your existing mortgage.
Here are some scenarios to help you know when the new qualification rules apply:
New Qualification Rules Apply
You are a first-time home buyer looking to apply for your first mortgage
You refinance an existing CIBC mortgage
You transfer your mortgage to CIBC from another financial institution
Your mortgage is coming up for renewal
Need additional help understanding the impact of the new rules?