Standardized definitions and computational logic for the Canadian mortgage market. This manual defines the operational parameters for fixed and variable interest rate mechanisms.
Typical Prime Rate adjustment increment.
Regulatory margin above contract rate.
Maximum cycle for conventional loans.
A debt instrument where the interest rate is linked to the lender's Prime Rate. In this configuration, the monthly payment fluctuates automatically in direct correlation with central bank rate shifts. This ensures the principal reduction remains constant while the interest component scales with the market.
A restrictive lending agreement that limits the borrower's ability to liquidate the debt before the maturity date. Any breach of this protocol via early repayment triggers a liquidation penalty, calculated as either three months' interest or the Interest Rate Differential (IRD). More details are available in the Prepayment and Liquidation Protocols section.
A mathematical assessment of lending risk. It is the quotient of the total loan amount divided by the appraised value of the collateral. Ratios exceeding 80% require mandatory default insurance as dictated by the Federal Stress Test Algorithm.
Calculation used for fixed-rate liquidation. IRD = Principal × (Contract Rate - Current Market Rate) × (Remaining Term / 12).
View manualGross Debt Service (GDS) must not exceed 32-39% of gross income. Total Debt Service (TDS) is capped at 40-44% depending on credit score.
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Required inputs for the initiation of a mortgage file. Incomplete documentation will halt the automated underwriting process.
Letter of Employment (LOE) and recent pay stubs covering the last 30 operational days.
Notice of Assessment (NOA) for the two most recent fiscal years to verify zero tax liability.
90-day history of down payment funds to satisfy anti-money laundering (AML) protocols.
Purchase and Sale Agreement including the MLS listing and property tax estimates.
Access the core engine to compare fixed and variable rate structures based on current Montreal market data.
Launch Rate Engine