Scotiabank Canadian Legislative Covered Bonds Presentation
Mortgage Policy Developments in Canada
2017
2016
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Ontario government imposed 16 measures aimed to cool the rate of house price appreciation. Key aspects include:
15% non-resident speculation tax imposed on buyers in the Greater Golden Horseshoe area who are not citizens, permanent residents
or Canadian corporations
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Expanded rent control that will apply to all private rental units in Ontario
Legislation to allow for a vacant home tax
$125 million five-year program to encourage construction of new rental apartment buildings by rebating a portion of development
charges
CMHC qualifying stress rate for all new mortgage insurance must be the greater of the contract mortgage rate or the
Bank of Canada's conventional five-year fixed posted rate, currently at 4.64%
CMHC updated low-ratio mortgage insurance eligibility requirements for lenders wishing to use portfolio insurance
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Maximum amortization 25 years
$1 million maximum purchase price
Minimum credit score of 600
Property must be owner occupied
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2015
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2014
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2012
Canada Revenue Agency now requires reporting of a disposition of a property for which the principal residence
exception is claimed. Foreign buyers are not able to claim the primary residence tax exemption
Ministry of Finance launched a public consultation process regarding lender risk sharing. Comments are required to be
submitted by the end of February 2017
B.C. government introduced an additional 15% land transfer tax on non-resident purchases in Metro Vancouver
Minimum down payment on insured mortgages on homes valued C$0.5 - C$1 million increased from 5% to 10%
CMHC discontinued offering mortgage insurance on second homes and to self employed individuals without 3rd party
income validation
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Maximum amortization on insured mortgages reduced to 25 years (from 30)
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Maximum amount borrowed on insured mortgages at refinancing reduced to 80% (from 85%)
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CMHC insurance availability is limited to homes with purchase price < $1 million
.
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For insured mortgages, maximum gross debt service ratio of 39% and maximum total debt service ratio of 44%
Maximum LTV for HELOCS lowered to 65% (from 80%)
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