Bob Sethi, B.Comm | 604.273.2828


New Parameters Regarding the Application of the Government Guarantee for Mortgage Loan Insurance

Homeowners - if you have or want a line of credit, read below for changes effective April 18, 2011.

New Parameters Regarding the Application of the Government Guarantee for Mortgage Loan Insurance

On January 17, the Government of Canada announced new mortgage insurance parameters regarding the application of the government guarantee. The News Release and Backgrounder issued by the Department of Finance, summarizing the new rules, is attached for your information.
Consistent with the parameters, CMHC will:

Effective March 18, 2011

  • Limit the maximum amortization period to 30 years for a mortgage loan with a loan-to-value (LTV) ratio above 80%. (The maximum amortization period will continue to be limited to 25 years for chattel loans insured under CLIP and for on-reserve loans secured by a Ministerial Loan Guarantee.)
  • Limit the loan to value ratio to 85% for the refinance of an owner-occupied residential property with 1 to 4 units.

Effective April 18, 2011

  • Mortgage Insurance for non-amortizing housing loans (lines of credit) will no longer be available. (CMHC Mortgage Insurance will continue to be available for amortizing housing loans with loan to value ratios of up to 80, with single or multiple components, secured by a collateral mortgage).
CMHC supports the Government of Canada’s on-going efforts to maintain a strong Canadian housing market and encourage Canadians to save through homeownership. Consistent with the parameters, CMHC will no longer offer insurance for mortgages falling outside the scope of the new parameters after the effective date. Similarly, only mortgage loans that fit within the scope of the new parameters will be eligible for CMHC securitization programs.


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Bob Sethi, B.Comm
RE/MAX Westcoast
#110-6086 Russ Baker Way
Richmond, BC
V7B 1B4 Canada

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