CMHC Second Home

Eligible borrowers

Individuals must be Canadian citizens or permanent residents of Canada (for homeowner loans only).

Loan-to-value (LTV) ratios

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):

• 1 unit: Up to 95% LTV

Minimum equity requirements

For homeowner loans:

• 1 unit: 5% of the first $500,000 of lending value and 10% of the remainder

Purchase price / lending value, amortization and location

• Maximum purchase price / lending value or as-improved property value must be below $1,500,000 for homeowner loans.
• Maximum amortization period is 25 years. (Buyers may qualify for a 30-year amortization through CMHC Home Start.)
• 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).

Traditional down payments

Down payments can come from sources such as savings, the sale of a property or a non-repayable financial gift from a relative.

Non-traditional down payments (homeowner loans only)

• The down payment must be arm’s length and not tied to the purchase and sale of the property, either directly or indirectly. Non-traditional sources could include unsecured personal loans or unsecured lines of credit.
• Available for 90.01% to 95% LTV for borrowers with a strong history of managing credit.
• Non-permanent residents and loans under the chattel loan insurance product aren’t eligible.

Creditworthiness

• At least one borrower (or guarantor) must have a minimum credit score of 600.
• CMHC may consider alternative methods of establishing creditworthiness for borrowers without a credit history.

Debt service ratios

Maximum thresholds:

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

Interest Rates

GDS and TDS Ratios must be calculated using an interest rate that is the greater of the contract interest rate plus 2% or 5.25%.

Advancing options

• Single advances: Improvement costs less than or equal to 10% of the as-improved value.
• Progress advances: New construction financing or improvement costs greater than 10% of the as-improved value.
• Full Service: CMHC validates up to 4 consecutive advances at no cost.
• Basic Service: Lender validates advances without pre-approval from CMHC.