In 2020, in the face of soaring house prices and increasing household debt, Canada’s largest mortgage insurer, Canada Mortgage and Housing Corp. (CMHC), changed its criteria to make it harder for people to qualify. CMHC did so by reducing the maximum allowable household debt-servicing levels and tightening the personal credit rating criteria.
In Canada, homebuyers with less than 20-per-cent down payment are required to get mortgage insurance to protect the lender in the event of a default. By making it harder for such homebuyers to get insurance, CMHC made it harder for them to qualify for mortgages.
