The client
A condo owner in Victoriaville refinanced a $232,000 balance to a new lender.
Balance at refinance
$232,000
19 years remaining
Syndicate deductible
$25,000
Passed back to co-owners under the building’s by-laws on a common-area loss
Combined income
$7,100/month
Other debt
$230/mo car loan
The problem
As part of the new lender’s file review, the syndicate’s own certificate of insurance — not just the condo fee statement the borrower had always provided — showed the building’s master policy carries a $25,000 deductible. The declaration’s own by-laws pass that deductible directly back to individual co-owners if a common-area loss ever triggers it, and the borrower had never carried any supplemental insurance for that specific exposure.
What the certificate of insurance actually showed
- ▸The syndicate's master policy deductible sat at $25,000 per occurrence on common-area losses
- ▸The building's own by-laws allocate that deductible among co-owners in proportion to their share of the common portions
- ▸The borrower's own home insurance policy had never included coverage for this specific pass-through exposure
Nobody had done anything wrong. The previous lender's file simply never asked for the certificate of insurance that would have surfaced the gap.
The numbers
The refinance itself was never complicated arithmetic; the deductible gap it surfaced was the actual work.
| The refinance, qualified on the existing balance | Amount |
|---|---|
| Balance at refinance | $232,000 |
| Remaining amortization | 19 years |
| Total debt service | Figure |
|---|---|
| Payment at the qualifying rate (6.60%), 19 years | $1,776/mo |
| Property tax + heat | $375 |
| Car loan | $230 |
| Total debt service | 33.5% |
33.5% leaves comfortable room and was never in doubt, in line with how renewal payments typically move across Canada. The refinance closed on schedule once the supplemental coverage was in place -- the deductible gap was a documentation and insurance question, not a ratio one.
The solution
A courtier hypothecaire licensed under Quebec’s Act respecting the distribution of financial products and services requested the syndicate’s own certificate of insurance directly, rather than relying on the condo fee statement the file had always used.
First, obtained the certificate of insurance from the syndicate and confirmed the specific deductible-sharing clause in the building’s own by-laws. The exposure was real and building-specific, not a generic condo-ownership risk.
Second, had the borrower’s insurance broker add a supplemental co-owner’s policy sized to the $25,000 deductible share. This closed the gap before the new lender would fund, not after.
Third, flagged for the file that this specific check — requesting the syndicate’s certificate of insurance, not just the condo fee statement — should be standard on every Quebec condo refinance going forward.
The outcome
The refinance closed at 4.60% and 33.5% total debt service, with the supplemental deductible coverage in place before funding.
This is an uninsured refinance, so there is no CMHC ratio ceiling; the 33.5% figure is informational, showing the file had ample room throughout.
What to take from this file
- 01A syndicate’s master policy deductible can be passed back to co-owners by the building’s own by-laws. A standard home insurance policy does not automatically cover that specific exposure.
- 02Request the syndicate’s certificate of insurance directly, not just the condo fee statement. The fee statement says what is owed monthly; the certificate says what could be owed if something goes wrong.
- 03This kind of gap can sit unnoticed for years. A previous lender not asking the question is not the same as the exposure not existing.
- 04Closing a documentation and insurance gap does not require touching the ratios at all. This refinance’s numbers were fine throughout; the fix was entirely about coverage.
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:
- ▸4.60% contract rate — rates move daily; not a quote.
- ▸the $25,000 syndicate deductible and the by-law passing it back to co-owners — each syndicate's own declaration and by-laws set its own deductible-sharing terms; there is no universal amount or formula.
- ▸the TDS figure — this is an uninsured refinance -- 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.