Genworth Canada says it won’t follow CMHC in tightening mortgage insurance eligibility
TORONTO – Genworth MI Canada Inc. says it’s holding steady on its credit score qualifications, despite a move by one of its main competitors to toughen mortgage lending standards.
The Oakville, Ont.-based company said Monday its insurance subsidiary, which is among the country’s largest insurers to residential mortgage lenders, “has no plans to change its underwriting policy, related to debt service ratio limits, minimum credit score and downpayment requirements.”
The announcement follows a move by the Canada Mortgage and Housing Corporation last week to raise the bar on its lending standards, making it more difficult for some to borrow money for a home purchase.
CMHC’s qualifying credit score for mortgage insurance was increased to 680 from 600, as part of changes that take effect on July 1. Limited gross and total debt servicing ratios were raised to standards of 35 per cent and 42 per cent, respectively.
Household debt service ratios measure how much income goes to paying interest and principal.
President and CEO of Genworth Canada, said the insurer believes its processes and monitoring of conditions and market developments “allow it to prudently adjudicate and manage its mortgage insurance exposure to this segment of borrowers with lower credit scores or higher debt service ratios.”
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