Second Mortgage Insurance program
Genworth will now be providing mortgage insurance up to 95% LTV to qualified homebuyers allowing second mortgages to be registered against the property.
Acceptable loan purpose
- Purchase
- Purchase Plus Improvements
- Refinance
Special Conditions
-
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 and CLTV ≤90%, the 1st mortgage does not have to be Genworth-insured, however, the following conditions will apply:
- 1st mortgage must be held by a Genworth approved lender
- 1st mortgage must be on repayment for a minimum of 1 year
- Amortization of the 1st mortgage may not exceed the amortization of the 2nd mortgage
-
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
Eligible properties
- Maximum 4 units where at least 1 unit must be owner occupied
- New construction or existing properties
Combined Loan-To-Value (CLTV) Ratio Limits:
- Max 95% CLTV (based on combined 1st and 2nd mortgage balances)
Equity Removal Limits
- For CLTV > 90%, the maximum equity removal is limited to $150,000
- For CLTV = 90%, 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
Terms/qualifying interest rates
- For terms less than 3 years, the qualifying interest rate is the greater of three-year posted rate or contract rate
- For terms of three years or more, the contract rate is used
- Fixed rate mortgages and variable rate mortgages
Amortization Options
Service
- Full and Standard Service acceptable
Portability
- Mortgage default insurance is portable under this program.
- The premium payable will be the lesser of the Premium as a % of the combined 1st and 2nd mortgage amounts, or the top-up premium as a % of the 2nd mortgage amount only as per table below
Premium rates*
| LTV Ratio |
Combined 1st & 2nd Loan Amounts |
2nd Mortgage Amount |
| Up to 65% |
0.50% |
0.50% |
| 65.01% - 75% |
0.65% |
2.25% |
| 75.01% - 80% |
1.00% |
2.75% |
| 80.01% - 85% |
1.75% |
3.50% |
| 85.01% - 90% |
2.00% |
4.25% |
| 90.01% - 95% |
2.75% |
4.25% |
| Premium is non-refundable |
| * a 20 bps premium surcharge will apply for every 5 years of amortization beyond the traditional 25-year amortization period |
| *a 25 bps premium surcharge will be applied for a 5-year HELOC and 50 bps for a 10-year HELOC term |
Borrower qualification
-
GDS/TDS Guidelines:
| GDS/TDS Guidelines |
| Bureau Score |
GDS |
TDS |
| Up to 679 |
35% |
42% |
| 680+ |
No limit |
44% |
- Existing requirements related to income, down payment and credit worthiness apply
- Maximum debt servicing ratios of 35/42.
Documentation requirements
- Lender required to have standard documentation on file
Ineligible Loan Types/Products
- CreditAssist
- New to Canada
- Progress Advance
- Homebuyer 100
- Investment Property Program
- Vacation Homes
