Are There More Mortgage Rule Changes Coming?

Marci • June 27, 2017

Recently, the Bank of Canada released its semi-annual Financial Systems Review  (PDF document), which identifies some of the major risks that the Bank foresees on the economic horizon.

Unsurprisingly, the Bank pinpoints increased levels of Canadian household debt and rapidly increasing prices in Toronto and Vancouver as vulnerabilities to the financial system. The good news is that, despite these vulnerabilities increasing over the past six months, the Bank of Canada is confident that the financial system remains resilient, and that overall, national economic conditions continue to improve. This positive outlook, combined with strong economic growth, are playing a role in the not-so-subtle hint that the Bank may increase interest rates sooner rather than later.

So what does this policy review indicate for future federal interventions in the mortgage market? The short answer is a lot.

It is no coincidence that the aforementioned vulnerabilities mirror the rationale used by the federal government for the mortgage insurance and eligibility changes in October. The Bank of Canada, the Department of Finance and CMHC are all aligned and focused on curbing elevated levels of household debt and ensuring the stability of the housing sector. This report could be viewed as representative of the problems and policies that the finance department is considering.

It is no surprise then that the Bank of Canada is pleased with the impact that the October changes have had on the debt-to-income ratios of insured mortgages (chart 3). But, the changes have also had an impact on increasing the market share of new mortgages that are uninsured. Clearly, this was an intended impact of the federal government’s changes and now the Bank of Canada is identifying the uninsured space as the next place to consider in terms of whether action is needed.

The Bank’s concerns will likely find a supportive audience at the Ministry of Finance and at CMHC. The data showing the increasing debt-to-income ratios for the uninsured sector (table 1) could trigger an investigation into additional regulation in the uninsured space by the Ministry of Finance or OSFI.

The first measure that is likely being considered is related to Home Equity Lines of Credit (HELOCs). This is clear for two reasons. First, because the Bank of Canada believes that the greater use of HELOCs could also be contributing to increasing household indebtedness. According to the Bank, HELOCs have increased at rates above income growth since early 2016, and have accounted for approximately 10 per cent of total outstanding household credit in recent quarters. Second, the Financial Consumer Agency of Canada recently released a report raising concerns that HELOCs may be putting some Canadians at risk of over borrowing. The timing of this report and the Financial Systems Review may not be coincidental.

It seems OSFI may be considering making changes to its B-20 underwriting guidelines; the Bank of Canada’s report suggests that OSFI will begin a public consultation shortly.

The critical policy question that the Department of Finance could be considering is whether to extend the stress test for insured mortgages to uninsured mortgages as well. This could create a more even playing field for lenders who originate a greater percentage of insured mortgages and could possibly have an impact in cooling the markets of Toronto and Vancouver. However, it could also negatively impact the rest of the Canadian housing market, which is not suffering from the same vulnerabilities of Toronto and Vancouver and could become unnecessary if the Bank of Canada raises interest rates.

Finally, there was a small policy section in the review that few may have paid much attention to but is important and provides some very helpful insights into the future of Canada’s private mortgage securitization market. The Bank of Canada recognizes that the recent changes have negatively impacted mortgage lenders that rely on portfolio insurance and that the increased growth in uninsured mortgages have created an opportunity for private residential mortgage-backed securities. The Bank of Canada goes even further and suggests that “properly structured private securitization would benefit the financial system by helping lenders fund loans.” (page 13).

It is surprising that this issue hasn’t received more attention because the Bank of Canada is tacitly endorsing a significant policy shift away from CMHC-backed mortgage securities to a private sector mortgage securitization market. This confirms that the creation of this market is an intended impact from the federal government’s changes to portfolio insurance and aligns with CMHC President Evan Siddall’s testimony to the finance committee on the changes to portfolio insurance.

Until the Bank of Canada is convinced that the housing sector no longer poses the greatest liability to the Canadian economy, Canadians will continue to see the federal government scrutinize mortgage activity in Canada with an eye to reduce the increasing levels of household debt in the country..

Let’s hope the government shifts their focus to unsecured household debt instead of further secured debt restrictions. However, if the Bank of Canada’s review is representative of the Ministry of Finance’s considerations, watch out for changes to HELOCs, through B-20 changes, the stress test being applied to uninsured mortgages and continued growth in the developing private sector mortgage securitization market.

 

This article originally appeared on Canadian Mortgage Trends, a publication of Mortgage Professionals Canada on June 20th 2017. It was written by the manager of government and policy for Mortgage Professionals Canada, Samuel Duncan. 

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Let’s Talk About Getting Top Dollar for Your Property

By Marci Deane • July 8, 2026
When it comes to selling your home, most people think the first call should be to a real estate agent. But the smartest first step often isn’t with your agent—it’s with an independent mortgage professional. Why? Because your mortgage plays a bigger role in your bottom line than most people realize. Planning to Buy After You Sell If selling means you’ll also be purchasing another property, you’ll want to know exactly where you stand financially before listing. Mortgage rules change regularly, and qualifying once doesn’t guarantee you’ll qualify again. Getting a pre-approval in place ensures you know what you can afford and eliminates surprises later. On top of that, reviewing the terms of your existing mortgage could uncover options you may not have considered. For example, porting your mortgage instead of arranging a brand-new one could save you thousands. Selling Without Buying Even if you aren’t planning to buy right away, there’s still an important step: understanding the cost of breaking your mortgage. Unless your mortgage is open, penalties apply—and they can be significant. By reviewing the numbers with a mortgage professional, you might find that simply adjusting your timeline could reduce or even avoid costly fees. Navigating Life Changes In situations like a marital breakdown, it can feel like selling the family home is the only path forward. But that’s not always the case. With the right guidance and a legal separation agreement, one spouse may be able to buy out the other, keeping the home and providing stability for everyone involved. The Bottom Line Selling your property is more than just putting a sign on the lawn—it’s about creating a financial plan that protects your equity and positions you for the best possible outcome. Before you take the leap, let’s sit down and review your options. 📞 If you’re ready to talk strategy and make sure you get top dollar for your property, I’d be happy to connect anytime.

Don’t Let Collections Derail Your Mortgage Application

By Marci Deane • July 1, 2026
Can You Get a Mortgage If You Have Collections on Your Credit Report? Short answer? Not easily. Long answer? It depends—and it’s more common (and fixable) than you might think. When it comes to applying for a mortgage, your credit report tells lenders a story. Collections—debts that have been passed to a collection agency because they weren’t paid on time—are big red flags in that story. Regardless of how or why they got there, open collections are going to hurt your chances of getting approved. Let’s break this down. What Exactly Is a Collection? A collection appears on your credit report when a bill goes unpaid for long enough that the lender decides to stop chasing you—and hires a collection agency to do it instead. It doesn’t matter whether it was an unpaid phone bill, a forgotten credit card, or a disputed fine: to a lender, it signals risk. And lenders don’t like risk. Why It Matters to Mortgage Lenders? Lenders use your credit report to gauge how trustworthy you are with borrowed money. If they see you haven’t paid a past debt, especially recently, it suggests you might do the same with a new mortgage—and that’s enough to get your application denied. Even small collections can cause problems. A $32 unpaid utility bill might seem insignificant to you, but to a lender, it’s a red flag waving loudly. But What If I Didn’t Know About the Collection? It happens all the time. You move provinces and miss a final utility charge. Your cell provider sends a bill to an old address. Or maybe the collection is showing in error—credit reports aren’t perfect, and mistakes do happen. Regardless of the reason, the responsibility to resolve it still falls on you. Even if it’s an honest oversight or an error, lenders will expect you to clear it up or prove it’s been paid. And What If I Chose Not to Pay It? Some people intentionally leave certain collections unpaid—maybe they disagree with a charge, or feel a fine is unfair. Here are a few common “moral stand” collections: Disputed phone bills COVID-related fines Traffic tickets Unpaid spousal or child support While you might feel justified, lenders don’t take sides. They’re not interested in why a collection exists—only that it hasn’t been dealt with. And if it’s still active, that could be enough to derail your mortgage application. How Can You Find Out What’s On Your Report? Easy. You can check it yourself through services like Equifax or TransUnion, or you can work with a mortgage advisor to go through a full pre-approval. A pre-approval will quickly uncover any credit issues, including collections—giving you a chance to fix them before you apply for a mortgage. What To Do If You Have Collections Verify: Make sure the collection is accurate. Pay or Dispute: Settle the debt or begin a dispute process if it’s an error. Get Proof: Even if your credit report hasn’t updated yet, documentation showing the debt is paid can be enough for some lenders. Work With a Pro: A mortgage advisor can help you build a strategy and connect you with lenders who offer flexible solutions. Collections are common, but they can absolutely block your path to mortgage financing. Whether you knew about them or not, the best approach is to take action early. If you’d like to find out where you stand—or need help navigating your credit report—I’d be happy to help. Let’s make sure your next mortgage application has the best possible chance of approval.

Best Mortgage Options for Canadian Homebuyers

By Marci Deane • June 24, 2026
Thinking of Calling Your Bank for a Mortgage? Read This First. If you're buying a home or renewing your mortgage, your first instinct might be to call your bank. It's familiar. It's easy. But it might also cost you more than you realize—in money, flexibility, and long-term satisfaction. Before you sign anything, here are four things your bank won’t tell you—and four reasons why working with an independent mortgage professional is the smarter move. 1. Your Bank Offers Limited Mortgage Options Banks can only offer what they sell. So if your financial situation doesn’t fit neatly into their guidelines—or if you’re looking for competitive terms—you might be out of luck. Working with a mortgage broker? You get access to mortgage products from hundreds of lenders : major banks, credit unions, monoline lenders, alternative lenders, B lenders, and even private funds. That means more options, more flexibility, and a much better chance of finding a mortgage that fits you. 2. Bank Reps Are Salespeople—Not Mortgage Strategists Let’s be honest: most bank mortgage reps are trained to sell their employer’s products—not to analyze your financial goals or tailor a long-term mortgage plan. Their job is to generate revenue for the bank. Independent mortgage professionals are different. We’re not tied to one lender—we’re tied to you. Our job is to shop around, negotiate on your behalf, and recommend the mortgage that offers the best balance of rate, terms, and flexibility. And yes, we get paid by the lender—but only after we find you a mortgage that works for your situation. That creates a win-win-win: you get the best deal, we earn our fee, and the lender earns your business. 3. Banks Don’t Lead with Their Best Rate It’s true. Banks often reserve their best rates for those who ask for them—or threaten to walk. And guess what? Most people don’t. Over 50% of Canadians accept the first renewal offer they get by mail. No questions asked. That’s exactly what the banks count on. Mortgage professionals don’t play that game. We start by finding lenders offering competitive rates upfront, and we handle the negotiations for you. There’s no guesswork, no pressure, and no settling for less than you deserve. 4. Bank Mortgages Are Often More Restrictive Than You Think Not all mortgages are created equal. Some come with hidden traps—especially around penalties. Ever heard of a sky-high prepayment charge when someone breaks their mortgage early? That’s often due to something called an Interest Rate Differential (IRD) —and big banks are notorious for using the harshest IRD calculations. When we help you choose a mortgage, we don’t just focus on the interest rate. We look at the whole picture, including: Prepayment privileges Penalty calculations Portability Future flexibility That way, if your life changes, your mortgage won’t become a financial anchor. A Quick Recap What your bank typically offers: Only their own limited mortgage products Sales-focused representatives, not mortgage strategists Default rates that aren’t usually their best Restrictive contracts with high penalties What an independent mortgage professional delivers: Access to over 200 lenders and customized mortgage solutions Personalized advice and long-term financial strategy Competitive rates and terms upfront Transparent, flexible mortgage options designed around your needs Let’s Talk Before You Sign Your mortgage is likely the biggest financial commitment you’ll ever make. So why settle for a one-size-fits-all solution? If you're buying, refinancing, or renewing, I’d love to help you explore your options, explain the fine print, and find a mortgage that truly works for you. Let’s start with a conversation—no pressure, just good advice.