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Mortgage Broker News | 29 Jul 2015, 09:00 AM Agree 0
It may be a small victory for brokers, but CMHC’s latest rule change is a welcome decision in an era of seemingly endless mortgage rule tightening.
  • LanceH | 29 Jul 2015, 11:09 AM Agree 0
    The crown corporation will consider annual principal, interest, tax and heat on the second unit when calculating debt servicing ratios.

    I find the above stmt a tad confusing, as it's "owner occ", so what do they mean ". . . on the 2nd unit"? Isn't the PIHT the same for both units? It's just one house. Since when is the bsmt apt taxed or heated separately? I can assure you, I don't have a separate furnace for my bsmt apt! Am I misreading?

    That aside, I think it helps the 1st time buyers get into a ppty in the expensive districts, though some will argue this simply buoy's the high prices.
  • Claire Drage | 29 Jul 2015, 12:16 PM Agree 0
    Ron is right - any change like this is a benefit for sure. Few points to add though is that we will have to wait and see if the lenders will adopt this guideline. There is also VERY specific restrictions (owner occupied duplex, 2 year past history of rent on 2nd unit required!!, 680+ beacon score) etc. The challenge maybe that on a purchase (which is the logical time to use this and pay the insurance premium), will the lender accept the current lease as proof of two year history and how easy will it be to get proof of two year history from the current sellers). It is definitely going to help some for sure though so I am all for some positive news
  • Jerry Quigley | 29 Jul 2015, 07:36 PM Agree 0
    Trust me, I'm a very positive person, however this seems to fly in the face of the governments desire to find ways to reduce mortgage debt, especially in the Toronto & Vancouver markets. Very strange.
  • james | 30 Jul 2015, 10:52 AM Agree 0
  • Ross Kay | 03 Aug 2015, 03:44 PM Agree 0
    The concern our firm had with this decision was over Capital Gains tax on the portion of the home being rented. Once a CMHC mortgage is applied for with that rental component part of the application, the opinions we received from CPAs was CRA now has you on record before you even buy the home that it was at least partially for rental purposes.

    Any MB or REALTOR who suggests these rental incomes be used to secure financing should suggest their clients talk to their tax advisor before making this disclosure on a mortgage app.
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