July 29, 2015 -

CMHC to Allow 100% of Suite Income. What does it mean?

The Buyer. 

Instead of claiming 50% of income suite rental amount to offset your mortgage now you can claim 100% of that rental amount.
As of September 28, 2015, if you're buying a property which has a basement apartment garnering $1000/month, the CMHC will see that $1000 as offsetting your original mortgage ratio(s). 
In theory, you will be allowed to spend more money on your house purchase than you would without the basement rental income.
Lending is easier, money is looser.

The Seller.

If you have a property with a 'legitimate' income suite attached, you may expect the price of your home to rise ever so slightly. 
If buyers now have more of the bank's money to spend, it seems that history shows us that the buyers will spend more. 
It is possible that the demand for income generating properties might strengthen, thus pushing up the price.

In Toronto.

Any typical listing will not warrant the use/income of basements or secondary suites. 
CMHC won't like this and may not consider these as legitimate income suites (for their purposes). 

Knowing that properties which generate rental revenue are allowed more financing than they had been previously, it might trigger a consequent change in the culture of real estate sales in Toronto. 

The curious part of this CMHC mandate is the timing. In an era of low interest rates, inflation, unprecedented housing prices, and loose money why does the CMHC want to fan the flames of inflation with even easier money?



Jesse Rycroft
Sales Representative

Office: 416.698.2090
Cell: 416.930.7950
Fax: 416.693.4284

Real Estate Homeward, Brokerage
1858 Queen Street East
Toronto, Ontario
M4L 1H1