Are you a high net worth individual looking for a mortgage that takes into account your significant liquid assets? A high net worth mortgage may be the right solution for you.
These types of mortgages consider not only your income and credit score, but also the amount of liquid assets you have available.
These mortgages can be used for a range of loan purposes, including purchasing a home, refinancing an existing mortgage, and switching/consolidating existing mortgages.
Qualifying for Your High Net Worth Mortgage
To be eligible for a high net worth mortgage, borrowers must be Canadian residents who are claiming taxes in Canada and have a minimum of $250,000 in liquid assets.
In addition to the minimum liquid assets requirement, borrowers must have $1 in liquid assets for every $1 in mortgage needed above the standard qualified amount.
For example, if a borrower qualifies for a $400,000 mortgage using standard debt servicing ratios but needs a mortgage of $900,000, they must have verified liquid assets of $500,000 in addition to their down payment.
All assets must be unencumbered and held by account holders who are on the mortgage application.
Partial percentage of liquid assets may be utilized in joint ownership situations where a co-owner of the assets is not a borrower on the mortgage application.
Applications with verifiable gross income of less than $1,000 per month or income solely from RRSPs are ineligible.
The liquid assets used to satisfy the net worth requirement cannot be used as investment income to qualify.
- Mutual Funds
- Chequing & Saving Accounts
- Stocks of a publicly traded Canadian or U.S company
- Stocks of a non-Canadian company owned within an investment account/portfolio held in a Canadian financial institution
- U.S Government T-Bills, Treasure Notes, and Treasury Bonds
- Canada/Provincial Savings Bonds
- Equity in existing properties being sold (a firm purchase and sale agreement is required)
- RIFs (discounted by 30%), only if RIF income is not used for income qualification
- Segregated Funds (Guaranteed Investment Funds (GIFs)
- Traded REIT Investments
- Retirement Accounts (discounted by 30% to account for withholding taxes)
Liquid assets held in holding companies can be used, if the following requirements are met:
- Transactions and business deals are limited to activities within Canada
- Assets are liquid and align with the list of eligible assets
- All owners of the Hold Co must be on the mortgage applications (Articles of Incorporation are required)
The following assets are not considered eligible: locked-in accounts, margin accounts, Panda bonds, cryptocurrency, non-traded REIT investments, and RESPs.
Total net worth mortgages can be used for primary, secondary, and rental properties.
Eligible Loan Purposes
Total net worth mortgages can be used for purchases, refinancing, and switching/consolidating existing mortgages.
The maximum amortization period for these mortgages is 30 years.
Maximum Loan-to-Value Ratio
These mortgages offer loan-to-value ratios of up to 80% for borrowers with a total debt servicing ratio of 60% or less, and up to 65% for borrowers with a total debt servicing ratio above 60%.
Total net worth mortgages have standard income confirmation and documentation policies, with some additional requirements for evidence of liquid assets over a 90-day history of ownership. This means that borrowers will need to provide documentation showing the average amount of their liquid assets over a 90-day period.
Some of the documents that you may need to provide when applying for a high net worth mortgage include:
- Evidence that your average liquid asset amount meets or is in excess of the liquid assets required, over a 90-day history of ownership (e.g. annual investment statements, quarterly statements, monthly statements)
- If funds were recently transferred in from an eligible liquid margin account, the minimum requirement is 30 days, and you will need to provide supportive documentation to confirm that the funds were previously held in an eligible margin account
- The most recent 30 days of history must show evidence that the funds are on deposit at a Canadian financial institution
Down Payment Requirements
To qualify for a high net worth mortgage, borrowers must have a minimum down payment of 20% on the property they are purchasing.
In addition to this down payment, borrowers must also have a minimum of $250,000 in liquid assets and must have $1 in liquid assets for every $1 in mortgage needed above the standard qualified amount.
For example, if a borrower qualifies for a $500,000 mortgage but needs a mortgage of $800,000 to purchase a $1,000,000 property, they will need liquid assets of $300,000 plus a down payment of $200,000, for a total of $500,000 in liquid assets. These requirements are in addition to any other documentation and income confirmation requirements for a high net worth mortgage.
Why Use Dominion Lending Centres?
Working with us as your mortgage broker is free, easy, and it will save you time and money.
Brokers now originate 47% of mortgages in Canada, up from 23% in 2003. This means more and more Canadians are realizing the benefits and savings that come with using a broker.
A bank can only offer you their mortgage products, while we can check with all lenders to get you the best rate possible for your situation.
We specialize in high net worth mortgages and we know which lenders have more favourable guidelines for these types of loans, so we can get you approved for the highest mortgage amount with the best deal possible.
Plus, you get unbiased advice from an experienced mortgage broker that is dedicated to you, and focused on giving you an amazing experience.
Take the Next Step Today
Take the next step right now by pressing the button on this page to get started.
After you fill in your name, email, and phone number you will be redirected to the online mortgage application so you can begin providing your information immediately. Alternatively, feel free to wait for our call and we’ll do it all over the phone.
We look forward to having you as our next valued client.