When federal mortgage insurance rules change, they are almost always written to apply prospectively rather than retroactively — new applications after a specific date follow the new rules, while files already committed to under the old rules keep them. This isn't an informal courtesy; it's written directly into the regulations themselves. The Eligible Mortgage Loan Regulations and Insurable Housing Loan Regulations, for instance, set out that a mortgage is governed by the rules in force on whichever date came first: when the insurer received the application, when the lender made a legally binding commitment to the loan, or when the borrower signed a binding purchase agreement for the property. A file that hit any one of those milestones before a rule change keeps the earlier rules, even though a brand-new application submitted the next day would face the new ones.
This same mechanism was used for the transition into the December 2024 reforms: high-ratio loans already approved between 1 August and 14 December 2024 were explicitly grandfathered under the rules in force before the changes took effect on 15 December 2024, rather than being forced to meet the new criteria retroactively. Every time the federal rules move, this same pattern repeats — a defined cutoff, and a defined milestone that locks a file into whichever side of that cutoff it fell on.
A mortgage that was insured under an earlier rule set doesn't get re-tested against today's eligibility criteria just because it's changing lenders. A genuine straight switch carries the file's existing insured or insurable status, and the terms that were locked in when it was approved, forward with it — the new lender isn't asking the insurer to re-decide whether this file would qualify under the rules in effect today, because insurability was already decided when the loan was originated and hasn't been reopened by a transaction that changes nothing but the lender.
In practice, this means a broker can encounter an older insured file today that would not qualify as insured if it were submitted fresh under current rules — a property value or a term structure that fell inside the rules at the time but wouldn't clear today's bar — and a straight switch of that file is still entirely legitimate, because it isn't being newly underwritten against today's insurer eligibility criteria.
New brokers sometimes assume that if a client's file wouldn't qualify under today's published rules, something must be wrong with continuing it forward. That assumption is exactly backwards for a straight switch. The file's insurability was decided once, at origination, under the rules that applied then, and a switch that doesn't touch the loan amount or the amortization doesn't reopen that decision. Treating an old file with unnecessary suspicion — or worse, advising a client that they need to somehow requalify it under today's rules — is a genuine, avoidable error.
This protection is specific to a genuine straight switch, and it disappears the moment the transaction stops being one. Turning the transfer into a refinance — adding new money for any reason — or extending the amortization beyond what remains both force the file to be assessed under today's rules from scratch, the same way both of those moves remove the stress-test exemption covered in Module 02. A client who wants to preserve favourable, older terms and also wants extra funds at the same time needs to understand that they generally cannot have both in the same transaction.
Before assuming what's possible on an older file, confirm when it was originally approved or committed to, and treat that date as the anchor for which rule set actually applies to it. Don't default to describing today's published thresholds as if they automatically apply to every file that crosses your desk — for a genuine straight switch, they may simply not be the relevant rules at all.
A mortgage was approved as an insured high-ratio loan under the rules in force before 15 December 2024. The client now wants a straight switch to a new lender at renewal, with no change to the loan amount or amortization. Does the switch get re-assessed against today's insurer eligibility rules?
Grandfathering exists precisely so that a file's insurability, once decided at origination, isn't reopened by a later transaction that doesn't change the loan amount or the amortization — a straight switch is exactly that kind of transaction. This is why the answer doesn't depend on income improving or on which lender is involved; those are separate underwriting questions from whether the file's original insured status still applies, which it does as long as the switch stays a genuine straight switch.
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