Government Mortgage Rule Changes

Below are the highlights of all the new rules and regulations.  There will be some more items to come in the next few weeks.  I will keep you posted. 

But do call or email with any questions.

Summary of Changes for High Ratio Deals above 80% LTV:

  • All high ratio (less than 80%LTV) deals submitted will be subject to the new Qualifying rate guidelines, i.e. Benchmark rate. (Today the benchmark rate is 4.64%)
  • The maximum GDS/TDS ratios allowed for high ratio (less than 80%LTV) deals are 39%/44%.

Conventional/Portfolio Insured Deals: Starting November 30th.

  • Deals over $1m, refinances, rentals and BFS are no longer eligible under the government portfolio insurance program.
  • The big question is whether what lenders will qualify the conventional deals at Benchmark rate. (Today the benchmark rate is 4.64%). We will have to wait and see what lenders come out with over the next few weeks
  • Most lenders have come out and say they still will be doing rentals, BFS, and refinances. Most have added rate premiums to these products.

New Tax law to File to report Your Principle Residence:

  • Under the new rules, in the year that you purchase a new primary residence you should file a T2091 to designate your property as a primary residence. If you do not, then when you sell it the property will be deemed to be NOT your primary residence and you will be forced to pay any taxes due on the realized capital gains.
  • In order to avoid paying this tax you will be able to ask CRA for an amendment to your tax return in the year that you failed to file the T2091 but there will be a penalty of $100 per month since the time you should have files up to a maximum of $8,000.

As more information comes to light we will be sending it out to you.

Thank you

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