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FINA Committee Report

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APPENDIX A: RECENT CHANGES TO HOUSING FINANCE

Effective October 2008:

  • Maximum amortization period of 35 years
  • Minimum down payment of 5%
  • Consistent minimum credit score requirement
  • New loan documentation standards

Effective April 2010:

  • Debt servicing standards calculated based on the higher of the mortgage contract rate or Bank of Canada conventional five-year fixed posted mortgage rate, for mortgages with variable interest rates or fixed interest rates with terms less than 5 years
  • Maximum refinancing limited to 90%of the property value
  • Minimum down payment of 20% on non-owner-occupied investment properties

Effective March 2011:

  • Maximum amortization period of 30 years
  • Maximum refinancing limited to 85% of the property value
  • Withdrawal of government guarantees on low-loan-to-value non-amortizing secured lines of credit (effective April 2011)

Effective July 2012:

  • Maximum amortization period of 25 years
  • Maximum refinancing limited to 80% of the property value
  • Maximum gross debt service ratio at 39% and the maximum total debt service ratio at 44%
  • Maximum purchase price of less than $1 million

Effective February 2016:

  • Minimum down payment of 10% for the portion of a house price above $500,000

Effective October 2016:

  • Requiring all insured mortgages to qualify under maximum debt-servicing standards based on the higher of the mortgage contract rate or Bank of Canada conventional five-year fixed posted mortgage rate
  • Standardizing eligibility criteria for high- and low-ratio insured mortgages (effective November 2016)

Source:     Department of Finance, Balancing the Distribution of Risk in Canada's Housing Finance System, 28 February 2017.