Why the new CMHC rules may not affect you
At the beginning of June, Canada Mortgage and Housing Corp. (CMHC) announced its decision to tighten the guidelines for insured mortgages as of this month. This applies to mortgages with down payments of less than 20 per cent that require CMHC default insurance.
Given the recent COVID-19 pandemic, there have been varying outlooks of how the Canadian housing market will be impacted. Evan Siddall, CEO of CMHC – who is also scheduled to depart from the organization later this year – strongly believes that Canadian housing prices will be lowering despite upward trends seen across the country. As a result, he implemented these new policies to stop borrowing from who he deems to be riskier buyers.
When he made this decision, there was a lot of disappointment among first-time homebuyers, as they believed this directly targeted them and negatively affected their ability to buy a home. Now that the dust has settled around this and these changes are in full effect, we’re gaining more insight into who may be affected, and how – some good news for those worried first-time buyers.
So, what exactly are the new CMHC guidelines?
As of July 1, the following rules came into effect for insured mortgages:
- The minimum credit score increased to 680 from 600, for at least one borrower
- Buyers can no longer borrow money for a down payment (does not include family gifts)
- Gross Debt-Service ratio decreased to 35 from 39 per cent (lowers affordability)
- Total Debt-Service ratio decreased to 42 from 44 per cent (lowers affordability)
- Multi-unit mortgage insurance refinancing is suspended (unless funds are used for repairs or reinvestment in the property)
Who could be affected?
These new rules have the potential to cut the purchasing power of many Canadian homebuyers as it decreases their overall housing affordability. At face value, we can expect this to impact first-time buyers the most, as they’re more likely to make down payments of less than 20 per cent, as well as buy a home close to their maximum affordability.
Some may not be affected at all
The mortgage rules technically only apply to lenders who use CMHC as their only insurer. In other words, not every lender (if any) will be following through with these new rules. Genworth MI Canada and Canada Guaranty are two CMHC competitors that have chosen not to adopt these stricter guidelines. So, depending on the lender you’re working with, Canadian buyers may not be impacted at all. In this climate, especially, shopping lenders and finding an unbiased mortgage advisor has never been more important and encouraged.
Changes like this are the exact reason we work with more than 30 banks and lenders at Homewise. Policies and lending guidelines are constantly changing, so having access to multiple lender options ensures that buyers can find the best mortgage for their unique needs.
Recently, we’ve received a lot of questions about how to navigate this situation. Given the many options we have available, we are able to guide our clients to the right lenders so they don’t have to worry about these new CMHC policy changes. Best of all, many top lenders with great features and rates don’t have to abide by this new criteria.
Given that these rules are new, we’re still learning how they can impact Canadian buyers. For the time being, it’s evident there are other avenues for many purchasers to get a great mortgage without being impacted by these new guidelines.
Jesse Abrams is Co-Founder at Homewise, a mortgage advisory and brokerage firm based in Toronto. thinkhomewise.com
Once completed, Brightwater (master plan designed by Giannone Petricone Associates and Urban Strategies) will offer 2,995 new residences through a mix of condos and townhomes, as well as 150 affordable housing units. Brightwater I and Brightwater II, both designed by Diamond Schmitt Architects (DSA), are part of the first phase of the project.
Brightwater I is a five-storey boutique building, with a modern village aesthetic that pays homage to the heritage charm of Port Credit. Standing at 14 storeys, Brightwater II will contrast its sister building with a series of balconies that create a facade that embodies the movement of water, featuring a modern white cladding. The building is tiered and continues to lower in height at its edges, with a base of two-storey townhouses that visually echo the character of the existing neighbourhood.
Both Brightwater I and II's interiors are designed by Truong Ly Design and were inspired by the interaction between light and water and Port Credit's history. Inside the lobbies, architectural wood structures mimic the movement of water, with details carved of natural stone native to the area. Amenities will include a co-working space that opens onto a landscaped terrace, a state-of-the-art fitness studio, entertaining spaces and more. Residents will also benefit from a series of smart home features including a virtual concierge, unlimited internet data, master lighting control, WiFi through amenity spaces, keyless entry, programmable thermostats, a community app and more.
At the centre of Brightwater I and Brightwater II will be a single-storey retail building designed by DSA, featuring a heavy-timber design. Together, all three buildings will be connected by an expansive outdoor Brightwater Village Square, a grand public space which will transform the pedestrian experience. Framed by beautiful trees and outdoor seating, it will provide the perfect setting for everything from farmers' markets to pop-up celebrations. The Square is just one aspect of the 18 acres of new greenspace coming to the community, including a new nine-plus acre waterfront park, walking and cycling promenades, pedestrian mews and public plazas.
A wide array of urban and community amenities is also on the way, with more than 300,000 sq. ft. of retail (including an LCBO and modern grocer as anchors, designed by Turner Fleischer architects), restaurants, office space, and a future new elementary school and proposed community centre.
Even before launching, Brightwater was nominated for a BILD Award for Best New Community Planned/Under Development, and it has already won the prestigious Award of Merit for Healthy Communities by the Canadian Institute of Planners, for a master plan that includes features such as the bioswale system it will introduce, one of the first in Canada. Designed by landscape architect Public Work, the bioswales are a resiliency feature to decrease stormwater runoff while simultaneously nourishing neighbourhood trees. Additional resiliency features will support the biodiversity in the area and contribute to a healthy shoreline, lake and river.
For more information about the new Brightwater master-planned community and to register, visit 
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Nuances can arise in any of the options: both with the house construction, and with the purchase of a ready-built object. That is why it is recommended to use services such as 
After reviewing homemade designs, you can clearly understand what size your future home should be, how many rooms you want, and what they should be.
You can make a heated floor immediately during construction. This way, you can warm the whole house. An alternative can be solar energy, which won't allow you to freeze even in cold winter evenings.
After all the stages, you can already move on to finishing work, choosing a design, and so on.
This is only a short description of the main stages of construction. More details can be found in various articles, videos on the web. If you still doubt, then we recommend entrusting the house building process to professionals. It is enough to contact one of the many companies, for instance,
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