CMHC Refinance

Eligible borrowers

Individuals must be Canadian citizens, permanent residents of Canada, or non-permanent residents authorized to work in Canada.

Loan-to-value (LTV) ratio

Loan-to-value (LTV) ratios measure the ratio of a loan amount to the lending value of the property, expressed as a percentage.

For homeowner loans (owner-occupied properties):

• Up to 4 units, including the existing unit(s): Up to 90% LTV

Lending value, amortization and location

• Maximum lending value or as-improved property value must be below $2,000,000.
• Maximum amortization period is 30 years.
• Where additional insured financing is requested, the following amortization period options are available:
  • Maintain the amortization period schedule of the existing CMHC-insured loan.
  • Blend the remaining amortization period of the existing CMHC-insured loan with the amortization period associated with the additional financing using a weighted average.
  • Reset the amortization period regardless of elapsed time from the original closing date of the existing CMHC-insured loan. In such cases, the refinance loan is treated as a prior uninsured loan.
• Property must be in Canada, suitable and available for full-time, year-round occupancy, and must have year-round access (via a vehicular bridge or ferry if on an island).

Determining as-improved value

The property is assessed on a dual basis:

• The as-is value (the current market value of the property), and
• The as-improved value (the market value of the property after improvements), which is used to determine the loan-to-value ratio and down payment requirements.

If proposed improvements are generally accepted to add value to a property, the lender can submit to CMHC the as-is value plus the cost of improvements.

The lending value is the lesser of:

• The as-improved value, or
• The as-is value plus the cost of improvements.

Required documentation

• Improvement lists and cost estimates/quotes.
• Building plans.
• Building permit.
• Occupancy permit or, alternatively, a third-party report from a qualified professional, such as an inspector, architect, or engineer, confirming that the construction complies with applicable bylaws and regulations.

Rental income

We offer different approaches to rental income for qualification purposes. Find out more about the approach(es) that can be used to calculate rental income and the inputs to consider when calculating the debt service ratios.

Creditworthiness

At least one borrower (or guarantor) must have a minimum credit score of 600.

Debt service ratios

Maximum thresholds:

• Gross Debt Service (GDS) Ratio: 39%
• Total Debt Service (TDS) Ratio: 44%

Interest rates

The GDS and TDS ratios must be calculated using an interest rate which is the greater of the contract interest rate plus 2%, or 5.25%.

Advancing options

Loans are advanced via the applicable “progress advance” processing option:

• Full Service: CMHC validates up to 4 consecutive advances at no cost.
• Basic Service: Lender validates advances without pre-approval from CMHC.