New Mortgage Approval Rules Announced for Canadian Real Estate Transactions
Effective Jan 1st, 2018 | More Info Below
Are you looking to buy or sell a home or condo anytime soon? Well, you may want to learn a bit more about the new rules set out by the OSFI (Office of the Superintendent of Financial Institutions) for the Canadian Real Estate market. Get approved for a mortgage just got a little bit harder. However, the OSFI has done this for a very good reason; with the meteoric rises in real estate prices over the last several years, the OSFI is doing what it can to ensure we don’t see a crash in the Canadian housing market.
Check out the details on the new rules below.
The OSFI now requires the minimum qualifying rate for uninsured mortgages to be the greater of the five-year benchmark rate published by the Bank of Canada or the contractual mortgage rate +2%.
Federally regulated financial institutions must establish and adhere to appropriate LTV ratio limits that are reflective of risk and are updated as housing markets and the economic environment evolve.
Federally regulated financial institutions are now prohibited from arranging with another lender a mortgage, or a combination of a mortgage and other lending products, in any form that circumvents the institution’s maximum LTV ratio.