Brokers frustrated by one big bank's recent changes

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Mortgage professionals are calling for an independent lender to refocus on the rental property market as frustrations mount following rule changes at several lenders – most recently at a big bank.

Scotia made a fairly big change to rental rules,” Justin Blacklock of TMG The Mortgage Group - Averbach Mortgages explained. “They used to let us do a 70 per cent offset; now it’s 50 per cent of the rent off the mortgage.”

For every $1,000 of rent, clients can only now use $500 of that income toward qualifying for a mortgage. It’s a change that has affected a number of brokers.

“There are new regulations, rules and underwriting guidelines,” Ryan Kirwan of HQ mortgages told “Scotia changed their rules for rental properties – before you were able to offset (more of the) rental income and now you can only include 50 per cent of the rental property when trying to qualify for a mortgage.”

The changes were implemented at the end of August. However, brokers note that the Bank of Nova Scotia isn’t the only lender to make frustrating changes to rental mortgage qualifications.

“They all do it now,” Kirwan said. “Scotia was (just) the last (to make the changes).

And some players believe this new trend will open up an opportunity for an independent lender to corner this important end of the market.

“I’m frustrated by all the rule changes for clients – lenders are getting much stricter,” Blacklock told “There is an opportunity for a lender to corner the niche market for rental properties.”

As for dealing with it, brokers realize it is all part of the business.

“It’s just a matter of adapting,” Blacklock said. “Accept that (the industry) is changing. We have a way of romanticizing the past.”

  • Jason on 2013-09-16 3:23:30 PM

    It is a sign of the times, all of the new regulations are making it harder and harder...

    There is zero chance a monoline is going to change their policy anytime soon to open it up to real estate investors. The monolines all have the same source of funds, that is why there is no diversity in the products being sold. I see it getting worse and worse and that is why you better make sure you are with a good lender when you buy an investment property. The ability to pull out equity as it builds up simply will not happen for many anymore. It is true we do need to stop living in the past. In 2007 when you could buy with zero down and a 40 yr amortization on a rental and people bought 10 in one year, it should have never happened....

  • Chase on 2015-02-13 10:10:40 AM

    Hey are using Wordpress for your site platform? I'm new to the blog world but I'm trying to get started and create my own. Do you need any html coding knowledge to make your own blog? Any help would be greatly appreciated!

  • Alexandra on 2015-02-13 10:26:22 AM

    I couldn't resist commenting. Perfectly written!

  • Andrea on 2015-02-13 12:08:34 PM

    well said Jason, omg I remember back in the 90's when I was selling investment properties downtown T.O. .. no problem w/lenders & anyone could get into the market... now the "rich get richer" & well, you know how it goes...

  • Andrea on 2015-02-13 12:10:10 PM

    not to mention, those were the days when we expected a 10% r.o.i. !!! the good ole days!

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