Acceptable Loan Purpose and Applicable Loan-to-Value Limits
- Purchase transactions: 90% LTV
This program is designed for self-employed borrowers who are unable to provide traditional income verification but have a proven 2-year history of managing their credit and finances responsibly. Eligible borrowers typically own a small size business for a minimum of two years, which can be confirmed via a third-party arm’s length document. In addition, the borrower is required to declare their annual income and annual business revenue, which should be reasonable based on the industry, length of operation and type of business.
* For new construction properties in the territories (Yukon, Northwest and Nunavut Territories) where New Home Warranty is not available, Lenders must obtain either an occupancy permit or a third-party report from a qualified professional such as: an inspector, architect or engineer. The qualified professional must carry the appropriate liability insurance and confirm construction is completed in compliance with applicable bylaws and regulations.
The premium payable will be the lesser of the premium as a % of the total new loan amount or the premium as a % of the top-up portion on the additional loan amount (if existing insured) based on the rates below:
LTV Ratio | Premium Rate | Top-Up Premium |
---|---|---|
Up to 65% | 1.50% | 3.00% |
65.01% - 75% | 2.60% | 6.50% |
75.01% - 80% | 3.30% | 7.00% |
80.01% - 85% | 3.75% | 7.50% |
85.01% - 90% | 5.85% | 9.00% |
The mortgage insurance premium is non-refundable, paid at the time of closing and may be added onto the mortgage.
GDS | TDS |
---|---|
39% | 44% |
Mortgage insurance is portable under this program:
Outstanding mortgage balance = $100,000
Top-up mortgage amount = $80,000
New Loan Amount = $180,000 (90% LTV)
($100,000 x 2.30%) + ($80,000 x 9.00%) = $9,500
($180,000 x 5.85%) = $10,530
Premium Payable is $9,500
When porting with a top-up mortgage amount, the blended amortization option is available