CMHC changes underwriting practices on mortgage loan insurance

Mortgage rules
low commission home sales

The Canadian Press Staff

Published Monday, July 5, 2021 1:41PM EDT
Last Updated Monday, July 5, 2021 2:52PM EDT

OTTAWA — Canada Mortgage and Housing Corp. is easing its underwriting criteria for mortgage loan insurance after changes it made last year were not effective and caused it to lose market share.

The federal housing agency said Monday that it returned to considering a gross debt service ratio of up to 39 percent and a total debt service ratio of up to 44 percent for borrowers who have a strong history of managing payment obligations.

Gross debt service refers to the maximum amount of gross annual income that can be used for home-related expenses like mortgages, heat, or condo fees, while total debt service is calculated when these expenses are combined with monthly debt payments owed on items such as credit cards or cars.

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