Regulatory Changes for Mortgage Products April 19 2010

On February 16, 2010, the Government of Canada announced a series of regulatory changes to support the long-term stability of Canada’s housing market. The following changes will be in effect as of Monday April 19, 2010:

Qualifying Rate:

• Fixed Rate Mortgages of terms less than 5 years and all Variable Interest Rate Mortgages: Applications will be adjudicated based on the greater of the 5 Year Bank of Canada Benchmark Rate**, OR the actual customer rate (inclusive of any customer discretion).
• Fixed Rate Mortgages of terms 5 years or greater: Applications will be adjudicated based on the actual customer rate (inclusive of any customer discretion).
• This change applies to both conventional and insured mortgages.

Maximum Loan to Value when Refinancing on Owner Occupied Residential Property:

• The maximum loan to value ratio for the refinance of an owner-occupied property has moved down to 90%.

Maximum Loan to Value for Non-Owner Occupied (Rental) Residential Properties:

• The maximum loan to value ratio for the purchase, porting or refinance of 1 to 4 unit non owner occupied investment properties will be 80%.

ADDITIONAL INFORMATION:

• **The Bank of Canada Benchmark Rate is defined as the Chartered Bank – Conventional Mortgage 5-year Mortgage rate, published by the Bank of Canada each Monday, and can be found at http://www.bankofcanada.ca/en/rates/interest-look.html