Vancouver Mortgage BC CMHC Fees

Rates

High Ratio Mortgage Premiums

CMHC Premiums

Loan-to-Value	Premium on Total Loan		Premium on Increase to Loan Amount for Portability and Refinance
Loan-to-Value	Standard Premium	Self-Employed without 3^rd Party Income Validation	Standard Premium	Self-Employed without 3^rd Party Income Validation**
Up to and including 65%	0.50%	0.80%	0.50%	1.50%
Up to and including 75%	0.65%	1.00%	2.25%	2.60%
Up to and including 80%	1.00%	1.64%	2.75%	3.85%
Up to and including 85%	1.75%	2.90%	3.50%	5.50%
Up to and including 90%	2.00%	4.75%	4.25%	7.00%
Up to and including 95%	2.75%	6.00%	4.25%*	*
90.01% to 95% — Non-Traditional Down Payment***	2.90%	N/A	*	N/A

Greater than 25 years, up to and including 30 years: 0.20% Greater than 30 years, up to and including 35 years: 0.40%

New CMHC Rules Effective April 19, 2010

The changes are as follows:

For variable or fixed terms less than 5 years, qualifying rate is 5 years posted from Bank of Canada or contract rate if 5 years or greater (only on high ratio/ insured mortgages)
Refinance on rentals max at 90% ltv
Purchase on rentals max at 80% ltv
50% of rental income will be added to income
Second home will be allowed 1 unit property only
Borrower doesn’t need to show 1.5% closing cost; just the actual closing cost should be sufficient (ie. Lawyer’s fee, etc)
Effective April 9, 100% commissioned individuals cannot do NIQ anymore
Effective April 9, NIQ will be maxed at 90% LTV purchase and 85% refinance
Effective April 9, self employed individuals can go NIQ if he/she has been BFS for 3 years or less
Effective April 9, if client has been BFS for 4 years or more with an increasing trend in income, client may use most recent highest income and no need to do a 2 year average

CMHC’s TDS formula will change as follows:

PITH¹ + Other Debt
Borrower’s Gross Annual Income

¹ PITH means principal, interest, property taxes and heat

If the subject property generates rental income, then:
· 50% of gross rents can be included in the borrower’s income; and
· T + H for the property generating rental income can be excluded.

If rental income from another property where the borrower resides is being used to support the application, then:
· 50% of gross rents can be included in the borrower’s income; and
· T + H for the property generating rental income can be excluded.

If the borrower has other non-owner occupied, rental income generating residential properties, then:
· net rental income can be included in the borrower’s income; and
· PITH for these properties can be excluded from the debt service costs.

50% of condominium fees must be included, when applicable. For chattel or leasehold loans, 100% of site or ground rents must be included.

Clarification of Net Rental Income
Net rental income may be determined by using the borrower’s Canada Revenue Agency T776 Statement of Real Estate Rentals form as a guide for expenses.

If the lender is using the net rental income from the borrower’s income tax return, the figure can be grossed up by 15% only if deductions have been taken to depreciate or amortize capital assets. The 15% gross up can also be applied to rental income if the borrower has taken self-employed deductions associated with the rental income that were not included in the Statement of Real Estate Rentals form such as business use of home or motor vehicle expenses, only if the income has not already been grossed up by 15% to offset the depreciation or amortization of capital assets.

Alternatively, the lender can use their own internal guidelines for determining the net rental income. Net rental income is to include gross rents less operating expenses and at least the interest portion of any loan payment that is secured by a mortgage on the property. Operating expenses should include factors for management expenses where applicable as well as vacancy and maintenance.

Similar to CMHC’s guideline for self-employed income, Lender’s are required to use the average of the most recent 2 years net rental income to ensure the income level is stable. If the lender is confident that rental income is stable, the current net rental income can be used.

Implementation
The TDS formula detailed in this note will apply to transactional and Portfolio applications for mortgage loan insurance at all loan to values, submitted to CMHC on or after April 19, 2010 for loans that will be funded on or after April 19, 2010.

CMHC will consider exceptions to the requirements described in this note where the Approved Lender has documentation that the borrower has a legally binding purchase and sale, financing or refinancing agreement dated before April 19, 2010 and the closing date occurs on or after the effective date.