Economic Backdrop and Financial Performance Objectives

Legislation and policies - promoting a healthy Canadian housing market December 2015 - Department of Finance ■ Minimum down payment for new government-backed insured mortgages increased from 5% to 10% for portion of the value of a home being purchased that is between $500,000 and $999,999 (came into effect February 2016) April 2014 CMHC Discontinued offering mortgage insurance on 2nd homes and to self-employed individuals without 3rd party income validation July 2012 CMHC Maximum amortization on government-backed insured mortgages reduced to 25 years from 30 years Maximum amount that can be borrowed on a mortgage refinancing lowered to 80% from 85% ■ CMHC insurance availability is limited to homes with a purchase price of <$1 million lowered from $3.5 million Set the borrower's maximum gross debt service ratio at 39% and maximum total debt service ratio at 44% March 2011 - CMHC ■ Maximum amortization on government-backed insured mortgages reduced to 30 years from 35 years ■ Maximum amount that can be borrowed on a mortgage refinancing lowered to 85% from 90% February 2010 - Department of Finance Borrowers with insured mortgage terms of less than five years must meet the standards for a five-year fixed rate mortgage ■ Maximum amount that can be borrowed on a mortgage refinancing lowered to 90% from 95% Minimum 20% down payment is required in order to qualify for government-backed mortgage insurance on non-owner-occupied properties July 2008 Department of Finance ▪ Maximum amortization on government-backed insured mortgages reduced to 35 years from 40 years ■ A minimum 5% down payment is required in order to qualify for government-backed insured mortgages Minimum credit score requirements, new loan documentation standards, setting a maximum of 45% on borrowers' total debt service ratio 47|CANADIAN HOUSING MARKET RBC

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