Before October 17, 2016

Mortgages are divided into 2 categories, High Ratio and Conventional.

High Ratio– any mortgage that has a Loan to Value(LTV) of greater than 80%. These mortgages have less than a 20% down payment and are legally required to be insured by one of the three mortgage loan insurers in Canada. Usually comes with best rate.

Conventional- any mortgage that has a LTV of less than and equaled to 80%. These mortgages have at least a 20% down payment and are not required to be insured. Pricing is usually 0.10-0.15% higher than best rates.

All variable rate mortgages and fixed terms of 1-4 years need to qualify at the greater of the contract rate(the rate the borrower pays) and the Bank of Canada qualifying rate.

Five year and greater fixed rate mortgages are qualified at their contract rate.

As of October 17, 2016

Mortgages are divided into 3 categories, High Ratio, Conventional Insurable, Conventional.

High Ratio(insured)- any mortgage that has a LTV of greater than 80%. These mortgages have less than a 20% down payment and are legally required to be insured by one of the three mortgage loan insurers in Canada. All variable rate mortgages and fixed terms need to qualify at the greater of the contract rate(the rate the borrower pays) and the Bank of Canada qualifying rate. Best rates available.

Conventional Insurable(insured)- any mortgage that has a LTV of less than and equaled to 80%. These mortgages have at least a 20% down payment and can qualify under the insurer’s guidelines. All variable rate mortgages and fixed terms need to qualify at the greater of the contract rate(the rate the borrower pays) and the Bank of Canada qualifying rate. Best rates available.

Conventional(non-insured)— any mortgage that has a LTV of less than and equaled to 80%. These mortgages have at least a 20% down payment and do not qualify under the insurer’s guidelines. Five year and greater fixed rate mortgages are qualified at their contract rate. Rates are usually 0.10-0.25% higher than best rates.

Insurer’s Guidelines

Non-Insurable

1) Purchase price of property has to be less than $1 Million.

2) Mortgage is a purchase transaction or a transfer (no refinances).

3) The minimum client credit score is 600.

4) Debt Servicing Ratios(GDS/TDS) are max 39%/44% and qualified at the greater of the     contract rate(the rate the borrower pays) and the Bank of Canada qualifying rate(currently 4.64%).

5) Maximum amortization period is 25 years.

6) Rentals must be 2 to 4 units.

1) All refinance transactions and/or equity take out mortgages.

2) Conventional LTV 5 year fixed mortgages requiring the 5 year contract rate to qualify GDS/TDS.

3) Mortgages on properties that are valued at $1 Million or greater, regardless of LTV.

4) Conventional mortgage with amortizations exceeding 25 Years.

5) Single unit rentals.