TD Announces Rate Changes for Borrowers

June 29, 2012 | By


TD recently announced there are significant changes on the way for a variety of borrowers. That said, here is what’s changing (Note: this applies to federally regulated lenders only):

• HELOCs: The maximum loan-to-value on a HELOC will drop from 80% to 65%. That will sting borrowers who leverage HELOCs for productive purposes. However, lenders can still provide a 15% amortizing mortgage on top of a HELOC, for 80% loan-to-value total. OSFI tells us: “Existing HELOCs are not affected, but future offerings are subject to the limits.”

• Qualifying Rates: For variable rates and fixed terms less than five years, it will be “the greater of the contractual mortgage rate or the 5-year bench mark rate” published by the Bank of Canada.” This will push a small number of borrowers into 5-year fixed mortgages because they won’t qualify for shorter terms.

• Stated Income: Going forward, all self-employed borrowers must provide “reasonable” income verification (ie: a Notice of Assessment). Most lenders already have such policies. It appears that true “no-income documentation” stated income mortgages are officially a thing of the past at mainstream lenders.

• Down Payments: “Cash back should not be considered part of the down payment,” says OSFI. This effectively eliminates 100% financing, and is one of the most common sense guidelines of them all.

There are also other changes that may affect non-prime mortgages. We’re awaiting clarification on those before commenting further.

Federally regulated lenders have until “no later than fiscal year-end 2012” to comply with these guidelines. That ranges from October 31, 2012 for major banks to March 31, 2013 for other institutions. However, OSFI expects them to comply sooner if possible, so we may see some of these changes within a few months, if not weeks.

There’s no telling yet if provincial regulators will impose the same guidelines on the lenders they regulate (like credit unions).


5 Year VRM 2.90%

5 Year Fixed 3.09% (high ratio insured 30 quick close

5 Year Fixed 3.19% (high ratio insured 120 close)

5 Year Fixed 3.29% (no restrictions)

4 Year Fixed 2.99% (high ratio insured must fund before July 31st)

4 Year Fixed 3.09% (conventional)

3 Year Fixed 2.94% (high ratio) OR 3.04% (Conventional)

7 Year Fixed 3.99%

10 Year Fixed 3.99%


Filed in: Buying and Selling Real Estate, Home Owner Tips

About the Author (Author Profile)

Andrew is a West Coast enthusiast through and through. He is a native of the area that you will often find adventuring on one of the many sea to sky activities that abound in the Fraser Valley. Along with being in love with the place he calls home, Andrew is a well known and respected Realtor focusing on helping others to find their own perfect home in Langley, Surrey, White Rock and beyond! Visit to find your perfect home.

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