New CMHC Mortgage Rules on July 1 – The Park in Garden Heights, Red Deer, Alberta
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Canadian Mortgage and Housing Corporation (CMHC) eligibility rules are changing effective July 1, 2020

If you’ve been thinking about purchasing a new home, it’s advantageous to purchase by June 30.

The Changes

Any mortgage in Canada with less than 20% down must have insurance. The national provider of mortgage insurance is the Canada Mortgage and Housing Corporation (CMHC).

The main changes that CMHC has announced have to do with debt service ratios and credit score requirements for CMHC-insured mortgages. The new requirements are:

  • Gross debt service (GDS) ratios must be under 35, down from 39
  • Total debt service (TDS) ratios must be under 42, down from 44
  • Borrower’s credit score must be at least 680, up from 620
  • Borrowed down payments will no longer be allowed

What does this all really mean? In a nutshell, these new rules mean that you may not be able to get a mortgage for the home you really want today after July 1.

Trying to figure out your gross debt service ratio, total debt service ratio or getting your credit score can be complicated, confusing and not the best use of your time. The best people to speak with are your bank or a mortgage professional.

We Recommend

Avalon has a long withstanding relationship with Justin Woods at The Mortgage Centre who can help you with your qualifying and pre-approval needs.

Justin Woods
Tel: (403) 346-5410 Cell: (403) 872-0776 

For more information about The Park at Garden Heights, please visit our two new showhomes at 27 Gair Close.

Sales Inquiries:
Kevin Schreder
Tel: (403) 588-2392

Showhome Hours
Monday – Wednesday: 12 – 5 pm
Thursday & Friday: Closed
Weekends & Holidays: 12 – 5 pm

The July 1st deadline is fast approaching, so if you’re thinking of a new home, it may be prudent for you to buy now and firm your deal by June 30th.