The client
Three years earlier, this household's first purchase in Montreal closed on alternative credit alone — rent and utility payment history standing in for a first-time buyer’s Canadian bureau score that didn't exist yet. This second file, an upgrade purchase, looks nothing like the first: a real credit history, a materially larger income, and enough savings for a down payment well past what any minimum requires.
Borrowers
Combined income $11,200/month
After three years of Canadian employment history
First file (3 years ago)
Alternative credit, thin history
Not this purchase — the household's earlier file
Second purchase
$685,000, Montreal
Property tax $430/mo; lender heat estimate $170/mo
Down payment
$239,750 — 35%
Well past the 20% conventional threshold
Other debt
$340/mo car loan
the only debt on the file
The problem
There was no credit or income problem to solve on this file — the interesting part of the story is how different it looks from the household's first purchase. Where that file needed rent receipts and utility statements to stand in for a bureau score, this one arrived with three years of conventional Canadian credit and an income that had grown substantially since landing.
The only real work was structural: at 35% down, the purchase sat well clear of default-insurance territory, which changes which rules apply and which don't. Getting that distinction right — what's regulatory and what's simply a comfortable margin — was the actual task.
It is worth pausing on how different the two files really are, because the temptation on a second purchase is to assume the first file's structure just carries forward. It doesn't. A newcomer's first mortgage is often built entirely around documenting a credit history that doesn't exist yet; a second file, once that history is real, is a conventional underwriting exercise like any other. Treating this purchase as a newcomer file out of habit — over-documenting alternative credit that was no longer needed — would have slowed the file down for no reason.
The numbers
This time, $239,750 down on a $685,000 purchase — 35% — put the loan well under 80% LTV, so the $445,250 mortgage needed no default insurance at all. A down payment at that level sits well past what most down payment statistics show for a typical Canadian purchase, first or second.
| The conventional mortgage | Amount |
|---|---|
| Purchase price | $685,000 |
| Down payment (35%) | −$239,750 |
| Mortgage amount — no default insurance required | $445,250 |
| Contract rate | 4.39% |
| Minimum qualifying rate (greater of contract + 2% or 5.25%) | 6.39% |
| Ratio check at the qualifying rate | Figure |
|---|---|
| Payment at the qualifying rate, 25 years | $2,953/mo |
| GDS (payment + $430 tax + $170 heat) ÷ $11,200 income | 31.7% |
| TDS (GDS numerator + $340 car loan) ÷ $11,200 income | 34.8% |
31.7% and 34.8% sit comfortably inside even CMHC's insured maximums of 39% and 44%, though this uninsured file isn't bound by them at all — the comparison is worth naming to the client, since it shows just how much room three years of income growth had opened up.
Quebec's transfer duty
| Quebec welcome tax on $685,000 | Amount |
|---|---|
| 0.5% up to $62,900 | included below |
| 1.0% from $62,900 to $315,000 | included below |
| 1.5% above $315,000 | included below |
| Total transfer duty, payable in cash at closing | $8,386 |
The solution
An AMF-licensed Quebec mortgage broker treated this as a straightforward conventional file, and confirmed it stayed that way.
First, confirmed the LTV cleanly cleared 80%. At 35% down, there was no ambiguity about needing default insurance — but confirming it explicitly meant no premium, no premium tax, and no insurer conditions to satisfy.
Second, documented the three-year income progression. Letters of employment and T4s spanning the period since the first purchase gave the lender a clear, verifiable growth story rather than a single snapshot.
Third, kept the file's regulatory story accurate. Naming which rules genuinely applied — the minimum qualifying rate, yes; CMHC's insured ratio maximums, no, since this file is uninsured — avoided overstating what governed the approval.
Fourth, moved the file with the speed a strong conventional application allows. With no insurer sign-off in the loop and no alternative-credit assembly required, the underwriting timeline on this purchase looked nothing like the household's first one — a useful thing to set expectations around early, since clients who remember a slower first file sometimes brace for the same wait the second time.
The outcome
Approved and funded: conventional and uninsured at 65% LTV, with GDS at 31.7% and TDS at 34.8%. No default-insurance premium, no premium tax, and no insurer sign-off were part of this file at all.
Quebec's transfer duty of $8,386 was payable in cash at closing alongside legal fees and adjustments — the purchase's only significant closing cost, since there was no insurance premium or premium tax to budget for.
What to take from this file
- 01A second file rarely looks like the first. Three years turned a thin, alternative-credit approval into a conventional one with room to spare — document the progression, don't just re-run the old file's logic.
- 02Confirm the 80% LTV line explicitly, even when it looks obvious. A clean uninsured file avoids a premium, a premium tax, and an insurer's conditions entirely.
- 03Name which regulatory ceilings actually apply. CMHC's 39%/44% maximums make a useful comparison point on an uninsured file, but stating them as binding here would overstate the rule.
- 04A large down payment simplifies more than the LTV. With no insurer in the file, there was one less party's conditions to satisfy before closing.
- 05Quebec's transfer duty is unaffected by insurance status. Whether a file is insured or conventional, the welcome tax is calculated the same way on the purchase price.
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%.
- ▸CMHC — CMHC Reviews Underwriting Criteria — GDS 39% / TDS 44% maximums and the 600 credit-score floor for insured files.
- ▸Gouvernement du Québec — Droits sur les mutations immobilières — Quebec's transfer duties ('welcome tax') — 2026 indexed brackets.
- ▸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:
- ▸4.39% contract rate — rates move daily; not a quote.
- ▸$430/mo tax and $170/mo heat estimate — lender-standard estimates, not rules.
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.