For the last 15 years mortgage lending policy has become tighter and tighter. Lending and banking policies have been implemented with little to no thought put into what the consequences might be and if the policies would actually hurt or deter Canadians from homeownership.

However, a bit of good news. The banking regulator OSFI has clarified that insured borrowers, or those who have had to buy mortgage default insurance, can switch lenders without being stress tested and therefore EXEMPT! This means that if you have CMHC/SAGEN/Canada Guaranty Mortgage Default Insurance you can qualify to switch your mortgage to a new lender with the best rate a lot easier.

This is excellent news for people who are coming up on their first renewal.

Many banks have been sending VERY HIGH renewal rate offers 6.4%-6.99% for a 5-year fixed, assuming the borrowers would NOT qualify at another lender. Padding the bottom line? Maybe.

Now that the regulator has clarified the rule, if a borrower has an insured mortgage, and is looking for the best rate and terms upon renewal (with no extra funds or changes to amortization), then we can qualify them at the contract rate on not have to stress test them at 2% above the actual rate.

This means that you may once again have choices when renewing your mortgage!

The bad news? Borrowers who have conventional mortgages will still be required to be stress-tested 🙁

If your mortgage renewal is coming up in the next 120 days, contact us as soon as you can and we can start to shop around your bank’s renewal offer!