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CMHC announces new rules for home owners with rental suites

Posted on February 2, 2018 by Jivan Sanghera

As of September 28th, 2015, CMHC will be changing it’s borrowing rules to help facilitate more affordable housing in Canada.
Currently, home owners with legal rental units can use 50% of the rental income towards their total income which means that home buyers can borrow more money.
When the new rules come into affect, borrowers can count 100% of the rental income towards their total income.
Borrowers with less than 20% downpayment are required to buy mortgage default insurance which is available from CMHC, Genworth Canada and Canada Guarantee.
So if you have less than 20% and are interested in buying a home with a legal rental unit, CMHC will be the insurer for you.
But keep in mind that only legal units are eligible. Eligible 2-unit properties must be owner-occupied. The dwelling types are typically duplexes or single homes with a legal secondary suite. Some examples of typical secondary suites in 2-unit homes include self-contained basement rental suites, in-law apartments and garden suites (i.e. laneway homes).
If you are considering buying a rental property, talk to me and I can help you find the mortgage product that will suit your situation.

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