Banks tighten mortgage rules for non-residents

If your client is a non-resident, getting a mortgage just got harder, at least at two Canadian banks.

Bank of Nova Scotia recently amended its income verification policy for non-residents, who could circumvent the policy if they had large down payments, reports the Globe and Mail. And Bank of Montreal will require non-residents to verify their wealth and income sources.

Read: Ontario real estate associations don’t want foreign buyer tax

This new threshold comes amid concern that non-residents have been fueling rising housing costs and raising the risk of a market downturn. Read the full Globe report here.

Read: B.C.’s foreign buyer tax to help fund new rental units

Foreign nationals invested more than $1 billion into B.C. property between June 10 and July 14, with more than 86% of that in the Lower Mainland.

In an August report, CIBC proposed that the federal government raise the minimum down payment above 10% for homes valued between $500,000 and $1 million. The bank also suggested hiking the qualification rate for those seeking popular five-year, fixed-rate loans, which account for over 30% of originations.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.