Here is brief summary ...

I bought a house in Summer 2008 & got Mortgage from ING with 10% downpayment
Then 6 months back I booked another new home. When this new home was ready for possession, I inquired at different banks including ING for rates

Since I got better rate at BMO, so mortgage for new home was taken from BMO

After moving to new home, we decided to rent our First property
When I told ING about Renting, then told me my equity on home is less than 25% so I am not allowed to Rent

Is that True ?

I never heard about this guideline or rules. Then I discussed this issue with so many of my friends who earlier rented their properties
Almost everyone says " no need to inform Mortgage company about renting a property "

Not sure if I made a mistake or what ?

Can some one write me what exactly rule says ?
I tried CMHC website, couln't find any information related to this

Do all banks has different guideline or rules with respect to this
Just to undertand here are some figures...
(I bought home at $300,000 & balance mortgage is $240,000 )

Thanks

I am not aware of any such rule because I feel there is no such rule. Only for a new investment property one has to put 20% (and not 25%) down payment. Having said that, when you bought the earlier property and got mortgage from ING, you signed a declaration that you would be using the same as your principal residence and would not change the usage without the consent of the bank. Though almost no body informs the bank and change the usage as their circumstances may change and the bank also does not object as 1) mostly they are unaware of the change of usage and 2) so long they are getting the mortgage payments they do not care. But, come renewal time, they may refuse to renew but I have not seen happening this ever either.

So, if you want to still change the usage, you can do so because you have close to 20% or more equity in your earlier home and if ING refuses, you can go to any other lender and if you qualify, you should have no problem. And I believe you qualify as you got mortgage from BMO for the other house and you must have disclosed your earlier property.

Whatever you do, PLEASE DO INFORM you insurance company about the change in usage and they may charge you a little higher premium but if they are not informed, they may deny any claim so be sure to inform them.

Good Luck.

-----------------------------------------------------------------


Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada