CMHC has just tightened the requirements for insured mortgages coming into effect on July 1, 2020 - but what does that mean for you as a buyer?

First off, what is CMHC?  The Canada Mortgage and Housing Corporation (CMHC) is Canada's national mortgage insurance provider, who insure high ratio mortgages (i.e. mortgages with less than 20% down).

What is changing July 1, 2020?

- Limit on Gross Debt Service (GDS) Ratios from 39% to 35%

- Limit on Total Debt Service (TDS) Ratios from 44% to 42%

- Raising the minimum credit score from 600 to 680 for at least one borrower

- Banning non-traditional sources of down payment that "increase indebtedness"

So what does this mean for you as a purchaser?  Until July 1, 2020 - you have an extra 11% in buying power!  With interest rates at a historical low, which in turn means you can qualify for more mortgage, it's never been a better time to purchase a new home!

If you're worried about the new qualification changes - don't!  There are a few other national mortgage insurance companies (such as Genworth and Canada Guaranty) that have not adjusted their qualification requirements. 

That being said, money is incredibly cheap to borrow right now - and if you have had your eye on a new home, it's never been a better time to purchase!  We have a fantastic collection of homes available - contact us to set up a viewing!