Effective October 17th, 2016: The qualification rate (or “stress test”) will now apply on ALL insured mortgages (including high and low LTV 5-year fixed terms)

What this means for homebuyers/homeowners:
The “stress tests” means that new buyers will have to prove to lenders their ability to make mortgage payments if the rates are as high as the five year posted rates among Canada’s largest banks (currently 4.64%). This means that first time homebuyers are likely to be most affected by the new qualification rate, as all new borrowers with a down payment of less than 20% will be required to fulfill the standardized qualification.

Effective November 30th, 2016: Regulators are banning a wide array of mortgages from being insured.

What this means for homebuyers/homeowners:
The standards for low-ratio mortgage portfolio insurance and high-ratio mortgage insurance will now be the same. Thus mortgages to be insured in a portfolio will be forced to follow requirements such as: a maximum $1 million in value, a credit score of 600+, and a restricted amortization of 25 years in length. These qualifications will again increase the difficulty of securing such a mortgage.

Effective January 1st, 2017: New draft criteria will be imposed as to how much money federally-regulated mortgage insurers have to put behind their portfolios.

What this means for homebuyers/homeowners:
If you have a large balance outstanding on your mortgage, and a long period left to pay it off, you’re looking at a hike in premiums for mortgage insurance. These new requirements will include the creditworthiness of the homeowner, the remaining amortization period, and the outstanding loan balance.