The OSFI (Office of the superintendent of Financial Institutions) is placing key mortgage restrictions in their new B-20 underwriting guidelines. These guidelines are drafted for federal banks and trust companies. Credit unions are regulated provincially and are not currently subject to these changes.
Two key changes to the underwriting guidelines are……
Home Equity Line of Credit
- most banks and federal trust companies are now limited to 65% loan to value.
- Credit Unions in Ontario are still allowed to offer 80% loan to value to qualified borrowers.
Cashback down payments
- using cashback as your down payment will be banned at federally regulated financial institutions.
- this is still allowed in credit unions in provinces like Ontario.
For more information contact your local credit union or mortgage broker.