The Canadian Mortgage and Housing Corporation (CMHC) has announced a change in policy that makes it easier for those who plan to rent out part of their home.
When applying for a mortgage with a federally regulated financial institution (banks, insurance companies), you must get mortgage insurance or have a minimum down payment of 20% of the purchase price.
Even if working with another type of lender (credit unions, trust companies, etc.), you must follow the rules if your lender requires mortgage insurance.
The rule change will allow those with a owner-occupied, two-unit property to include up to 100% of the gross rental income in their mortgage application. The old rules only allowed 50% of rental income from a rental apartment.
In order to calculate the gross rental income, the capital cost (principal plus interest), property tax and heat will be factored in to reduce the amount of rental income.
It also requires a relatively strong credit profile. The minimum credit score to qualify will be 680, and the new policy takes effect on September 28.
If you would like more information, contact me at John@JohnOwen.Realtor or call me at 905-434-0067.