CMHC's requiem for refis?

CMHC's requiem for refis?


Refis through CMHC seem increasingly a thing of the past, with Q1 results pointing to an almost-70 per cent drop – a year-over-year decline dwarfing any dip in new mortgage volumes.

More specifically, insurance volumes covering those new originations fell about 23 per cent in the quarter compare to the year-ago period. That’s relative stability, say some brokers more concerned about the 69 per cent plummet in refinance volumes at the Crown corporation.

Those mortgage professionals are also concerned about what the declines means for their bottom lines and, more importantly, those of their most vulnerable clients.

“The government has been moving away from refinances even before the rule changes in July,” said Sarah Liles, a veteran of the industry. “And now with those changes the clients that really need refinances for debt consolidation have to lose their homes or look for private funds that could ultimately sink them.”

Last July’s move to lower the LTV for insured refis to 80 per cent effectively blocked many homeowners from accessing equity in their homes.

The decision has been lambasted by many brokers as they’ve seen that end of their business shrivel up.

Still, there have been lesser-known consequences.

“The result of this is that a client with a high ratio collateral mortgage will not be able to move their mortgage to another lender upon maturity,” High-volume broker Jim Tourloukis told early this month. “That’s to the extent the home’s value keeps the mortgage high ratio.”

But the fall in refi activity may continue, with brokers fearing the government is ushering CMHC out of that segment altogether.


The decline in business for CMHC falls in line with Jim Flaherty’s desire to curb household debt levels and end, what many call, homeowner abuse of refis.