CMHC announced sweeping changes to the way they will underwrite insured mortgages moving forward. CMHC may get to increase the down payment requirement to 10% from the current 5%
Here are the changes effective July 1, 2020..
1) Limiting the Gross/Total Debt Servicing (GDS/TDS) ratios to 35/42 down from the current 39/44
2) Increase the minimum beacon score requirement from 600 to 680 for at least one borrower (this will likely be the main applicant (higher income earner))
3) No non-traditional sources of down payment that increases indebtedness
Genworth Financial, the largest of the two private mortgage default insurance companies announced this morning that they have no plans to follow CMHC’s lead to make underwriting policy changes.
Thank you Genworth!