Talk to Tim at 403-648-1541

The economy is in flux. Now, more than ever, lenders and insurers are being very careful with mortgage approvals. Concurrently, there is a growing need for young and low income families to have access to affordable housing. To qualify for home ownership, to make it more affordable, or to supplement their income, many purchasers rent out their basement or secondary suites. In the past, only 50% of rental income generated from basements and/or secondary suites could be applied towards a homebuyer’s mortgage application. This means that although they could be generating $1000 in monthly rental income, only $500 would be considered.

CMHC has just announced that effective September 28, 2015, 100% of rental income will be factored into the mortgage application as a source of revenue. This means, homebuyers will have a higher probability of meeting the conditions necessary for approval. More approvals for homebuyers mean an injection to the affordable housing inventory as well as a shift from apartment/condo living towards residential neighbourhoods.

To qualify, certain conditions must be met. Here’s what we know so far:

  1. The rental property must be owner occupied.
  2. The insured rental property is only allowed 2 units (duplexes or single family homes with rental suites).
  3. The rental property must be LEGAL.
  4. Rental suites must be contained and have their own entrance.
  5. Property tax and heating costs must be factored into borrower’s debt.
  6. Owners of existing rental suites must provide 2 year’s worth of rental history to determine the amount allocated towards the mortgage loan.
  7. New units can accept a rent appraisal only if a vacancy rate was applied to estimated rental income.
  8. Mortgage applicants must provide financial documentation proving their ability to manage credit and must have at least a 680 credit score.
  9. For now, Genworth and Canada Guaranty are remaining at 50% allocation of rental income for mortgage applications.

CMHC’s announcement, the risk has now been significantly hedged and comes augmented with the opportunity to pay down your mortgage faster.
Call Tim Lacroix today at 403.648.1541 or email at