Effective September 28, 2015, homeowners will now be able to use 100% of their rental income when qualifying for a mortgage, prior to this just 50% of the rental income was allowed. In order to qualify for this new CMHC financing option the following conditions must be met.
This new changes offer some great benefits for consumers. Borrowers will now have easier access to mortgages when looking to buy a property that contains an accessory apartment. This will make home ownership more affordable while also potentially increasing the number of rental units available for tenants. As with every positive there is a potential negative. Easier financing for properties with rental units could further heat up markets such as Toronto but overall I would have to say that this is a good example of public policy making.
Locally in our market there is a strong need for good quality rental units. As of the end of June, the 12 month average price for a single family home in our area was $338,000. Being able to use 100% of any rental income you might have from a basement apartment etc. can go a long way in helping a buyer qualify for a mortgage while hopefully over the long term, providing for an increase in much needed rental units.