This program provides borrowers with the additional flexibility of allowing a Second Mortgage to be registered against their property up to 95% combined LTV on a purchase and 80% combined LTV on a refinance.
Acceptable Loan Purpose & Applicable Loan-To-Value Limits:
- Purchase transactions: 95% Combined Loan-To-Value (CLTV) based on 1st & 2nd mortgages
- Property value ≤ $500,000 – 5% down payment required
- Property value > $500,000 and < $1,000,000 – 5% down payment required up to $500,000, with an additional 10% down payment on the portion of the home value above $500,000
- Refinance transactions: 80% Combined Loan-To-Value (CLTV) based on 1st & 2nd mortgages
- The 1st mortgage must be Genworth-insured under any of the following scenarios:
- Purchase/Purchase Plus applications
- Combined Loan to Value (CLTV) is > 90%
- Alt. A applications
- If the application type is a refinance, the 1st mortgage does not have to be Genworth-insured, however, the following conditions will apply:
- 1st mortgage must be held by a Genworth Canada approved lender
- 1st mortgage must be on repayment for a minimum of 1 year
- Under all scenarios, the 1st mortgage must meet the following conditions:
- Current at time of 2nd mortgage application with stable repayment history
- 2nd mortgage agreement must contain cross-default clause (default on the first constitutes default on the second)
- In the event of a re-advanceable 1st mortgage, no amount may be re-advanced until after the 2nd mortgage is paid out
- If CLTV > 90%, the 1st mortgage must be held by the same lender
Maximum Property Value:
- Maximum 4 units where at least 1 unit must be owner occupied
- New construction covered by a lender approved New Home Warranty Program
- Existing resale properties
- Readily marketable residential dwellings, located in markets with demonstrated ongoing re-sale demand
- Estimated remaining economic life of the property should be a minimum of 25 years.
Equity Removal Limits:
- Property value must be less than $1,000,000. Exceptions may be considered for LTV ≤ 80%.
Qualifying Terms And Interest Rates:
- For CLTV ≤ 80%, equity removal is limited to $200,000
- If the loan purpose is to consolidate the 1st and 2nd mortgages, the maximum CLTV ratios will apply
- Fixed, standard variable, capped variable and adjustable rate mortgages are permitted
- Maximum interest rate term of 25 years
- LTV >80%
- For mortgages with fixed rate terms greater than or equal to 5 years, the contract rate is used.
- For mortgages with fixed rate terms less than 5 years and all variable rates regardless of term, the qualifying interest rate is the greater of the contract rate or 5-year benchmark rate.
- LTV ≤ 80%
- For mortgages with fixed rate terms greater than or equal to 3 years, the contract rate is used.
- For mortgages with fixed rate terms less than 3 years and all variable rates regardless of term, the qualifying interest rate is the greater of the contract rate or 3-year posted rate.