5 Year Fixed 3.54%

5 Year Variable 2.70%

Adjustment to mortgage rules could help save you money at renewal time

Adjustment to mortgage rules could help save you money at renewal time

Date Posted: May 15, 2018

The three default insurers (CMHC, Genworth, and Canada Guaranty), along with Department of Finance have recently clarified some of the regulatory policy that for the first set of B-20 rules released in October of 2016.

Previously, refinances fell in the “uninsured” category which meant they were unable to be default insured. Once a mortgage had been refinanced, it was never able to be insured and as a result was subject to higher interest rates. On the other hand, transfers which involve switching your mortgage to a new lender to take advantage of interest rate savings or the best deal, were eligible for default insurance and in turn lower interest rates.

As of April 30th, previously refinanced mortgages that are now simply transferring lenders, (no additional funds being added to the mortgage and an amortization period that does not exceed the remaining amortization period or 25 years) are now eligible for default insurance and therefore insured mortgage rates.

For further details and examples see the releases from Canada Guaranty and Genworth.