Effective September 28, 2015, CMHC will include 100% of basement suite income when qualifying borrowers on a 2 unit owner occupied property.  What this means is that the borrower will qualify for more when purchasing a new property or refinancing an existing property.  The annual principal and interest, property taxes and heat for the property including the secondary suite must be used when calculating the debt service ratios.

For example if a borrower had an annual income of $60,000 and was looking to purchase a home with property taxes of $2,500 annually and heating costs of $1,200 per year, without the rental income the maximum mortgage amount that they would qualify for would be approximately $360,000. However, if they were to be able to use the additional 100% of the rental income from the secondary suite of $1,000 per month, the maximum mortgage amount increases to approximately $449,000.  That’s a difference of almost $90,000 in mortgage financing, based on a 5 year fixed rate of 2.59% and a 25 year amortization.

Find out more about the new rental income policy here or contact us.