Federal government changes mortgage insurance rules

Canadian key household debt ratio hits record high

Canada’s household debt is now bigger than its GDP, for the first time

Canadians now owe $1.68 for every $1 of disposable income. The ever mounting debt load is being driven by low interest rates. TransUnion suggests one million Canadians will be in trouble if interest rates rise just 1.0%.

On October 3, 2016, the Government of Canada announced changes to mortgage insurance rules. Effective October 17, 2016, all insured mortgages will now use the Bank of Canada five-year mortgage rate when calculating affordability tests.

In the same announcement, the Government introduced new requirements for taxpayers to report sales of principal residences even if they intend on using the principal residence exemption from capital gains tax. Permanent non-residents will now be disallowed from using the exemption.

Click here for more information on these changes.