The client
An investor in Ingersoll was refinancing a personally-held rental to $275,000, one property in a small portfolio that also includes a rental titled to the investor's own numbered holding company.
Subject property (personal)
$228,000 existing @ 4.70%
Refinancing to $275,000
Other property (holdco-titled)
Mortgage missed one payment
Personally guaranteed by the investor
Combined portfolio income
$8,900/month
Other debt
$250/mo car loan
The problem
A personal guarantee behind a corporately-held mortgage means the guarantor is on the hook for the debt -- and a missed payment on that debt can report against the guarantor's own personal bureau file, not just the corporation's, since credit bureaus track guaranteed obligations against the individual who stands behind them.
What the bureau actually showed
- ▸The holding company's mortgage on the third property missed one payment during a slow rent-collection month
- ▸Because the investor had personally guaranteed that mortgage, the missed payment reported as a derogatory mark on the investor's own personal bureau file
- ▸A first lender read the mark as the individual's own mortgage default, without checking whether the underlying mortgage was even in the investor's own name
The two personally-held properties, including the one being refinanced, had never missed a payment. The mark on the bureau belonged to a debt the investor had never personally borrowed.
The numbers
Once the bureau mark was correctly traced to a guaranteed corporate debt rather than a personal default, qualifying the refinance was straightforward.
| Refinancing the personally-held property | Amount |
|---|---|
| Existing balance (personally-held property) | $228,000 |
| New refinance balance | $275,000 |
| Total debt service | Figure |
|---|---|
| Payment at the qualifying rate (7.05%), 25 years | $1,935/mo |
| Property tax | $335/mo |
| Heat (lender estimate) | $130/mo |
| Car loan | $250/mo |
| Total debt service | 29.8% |
29.8% leaves considerable room, consistent with what credit-score data shows for borrowers whose own repayment history is clean -- the ratios were never the obstacle in this file. The obstacle was a bureau notation that belonged to a different borrower's debt entirely, even though a guarantee put the investor's name on it.
The solution
A mortgage agent licensed under Ontario's Mortgage Brokerages, Lenders and Administrators Act separated what the guarantee actually made the investor liable for from what the bureau notation made it look like.
First, obtained the holding company's own mortgage statement, showing the missed payment belonged to the corporation's loan, in the corporation's name, with the investor as guarantor rather than borrower.
Second, supplied the guarantee agreement itself, confirming the investor's obligation was contingent and secondary -- a personal guarantee behind a corporate debt, not a personal mortgage the investor had ever defaulted on directly.
Third, provided clean payment histories for both personally-held properties, including the one being refinanced, as direct evidence the individual's own borrowing record had never included a missed payment.
The outcome
The personally-held property's refinance funded at 5.05%, with the bureau mark correctly read as a guaranteed corporate obligation and total debt service settling at 29.8%.
Because this refinance is uninsured, CMHC's ratio maximums do not apply directly; the 29.8% figure is informational.
What to take from this file
- 01A personal guarantee can put a corporation's missed payment on the guarantor's own bureau file. A derogatory mark does not always mean the individual borrowed and defaulted personally -- check whose debt it actually is before assuming the worst.
- 02Titling one property in a portfolio to a holding company does not insulate the personal bureau file from that property's own payment history if a personal guarantee stands behind the mortgage.
- 03The holding company's own mortgage statement is the reliable source for tracing a bureau mark to its real debt, not the bureau notation's own generic description.
- 04Clean payment histories on the properties the investor actually borrowed against personally are direct, persuasive evidence when a lender misreads a guaranteed obligation as a personal default.
Sources
Every regulatory figure in this file traces to one of these primary sources. Client details and anything that varies by lender are illustrative, as flagged below.
- ▸OSFI — Minimum qualifying rate for uninsured mortgages — the minimum qualifying rate — greater of contract rate + 2% or 5.25%.
- ▸Provincial/territorial mortgage-broker legislation fetched directly (bclaws.gov.bc.ca, legisquebec.gouv.qc.ca, fcaa.gov.sk.ca, web2.gov.mb.ca, nslegislature.ca, assembly.nl.ca) plus FCNB's own site for NB and CanLII's index for PE — see notes for per-province method — provincial mortgage regulators and licence titles.
Illustrative in this file — lender-specific, not rules:
- ▸5.05% contract rate — rates move daily; not a quote.
- ▸the personal guarantee behind the holding company's mortgage — not every lender requires a personal guarantee on a corporately-held property; this reflects one lender's own condition for financing that corporation.
- ▸the TDS figure — this refinance is uninsured, so there is no CMHC ratio ceiling -- the number is informational.
Authority & provenance
How this case file was built
We publish the origin, the verification method and the reviewer for every case file, so you can judge how far to trust it before you rely on it with a client.
Where it comes from
Derived from files handled by Treadstone’s fulfillment desk and from scenarios contributed by partner brokerages. Names, employers, exact amounts and dates are changed so no client or file is identifiable.
Provenance: Composite — a pattern seen repeatedly on fulfilled files, not a single transaction.
What is verified
Every regulatory figure traces to a primary source listed above and was checked against it on the date shown. The arithmetic is recomputed by machine on every rebuild.
Anything that varies by lender is labelled illustrative rather than stated as a rule.
Who reviewed it
Reviewed for Canadian regulatory accuracy before publication, and re-checked whenever a cited rule changes.
Reviewed by: Nicholas Parson, Treadstone Associates — reviews every case file before publication.
This case file is professional reference material for licensed mortgage professionals. It is not advice to a borrower, and it is not a lender commitment. Insurer rules, qualifying rates and provincial taxes change — confirm the current position with the insurer, regulator or lender before you rely on any figure here in a live file.