Canadian Mortgage Advisor
8-8 Strathearn Avenue
Greater Toronto Area , ON , L6T 4L9 Canada
1-416-930-1225

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Effective April 19, 2010, the Canadian Department of Finance implemented some changes on how CMHC insures a mortgage against any defaults.

It clearly stats that the “Canadian Department of Finance require that all borrowers meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term. This initiative will help Canadians prepare for higher interest rates in the future.”

This simply means that if anyone wants a variable rate mortgage, then the borrower has to qualify for a Bank of Canada posted rate.

This rate essentially ensures that the borrower has the ability to pay if the interest rate goes up. Unfortunately it also keeps a lot of borrowers at bay.

The qualifying rate is used to calculate a borrowers Gross or Total debt service ratio.

It is the Bank of Canada who looks at the posted rate of the larger Canadian banks every week (Wednesday). Then it calculates a benchmark rate from all those rates.

CMHC then takes this data and calculates the qualifying criteria of the borrowers. (Emili)

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About Us

Sudip Adhikari.
Agent License #M10001082
Broker Mortgage Diligent -
Head Office -1305 Matheson Blvd East, Mississauga, ON L4W 1R1
FSCO #10252 O.A.C , E&OE

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