RMG Mortgages Mortgage Review: Rates, Lending Guidelines and Who They Suit

RMG Mortgages Mortgage Review: Programs & Lending Guidelines

How RMG Mortgages's lending guidelines read from the broker side — the programs on the shelf, how income is qualified, credit floors, terms and where they lend. Consumer-facing policy only: broker submission mechanics and compensation are out of scope, and guidelines change, so confirm anything you are planning around with the lender or a licensed broker.

RMG Mortgages' Mortgage Offering — Residential

RMG lends through mortgage professionals as part of the MCAP group, and its offering is deliberately narrower than MCAP's own — prime lending done cleanly, with an alternative shelf behind it.

Core lending. Insured, insurable and uninsured mortgages on purchases, transfers, refinances, ports and assumptions, on owner-occupied homes of up to four units and second homes occupied by the borrower or a relative rent-free.

Named products:

• Standard fixed and adjustable — the full-featured offering, three- to five-year terms plus a five-year adjustable.
• Low Rate Basic — a discounted, reduced-feature mortgage. Portable but not assumable, with a heavier early payout charge.
• Cashback — 1% to 3% cash on five-year fixed and adjustable purchases and transfers, repayable on a declining scale if the mortgage is broken.
• Safeguard — a genuine second mortgage behind an existing RMG first, to 80% combined.

Rentals, insured and insurable only, on non-owner-occupied properties of two to four units, at a rate premium.

Also available: purchase-plus-improvements, bridge financing to 120 days, rent-to-own on insured files, and a transfer program covering the discharge fee and capping the outgoing lender's costs.

There is no home equity line of credit at RMG at all.

RMG Mortgages Income and Qualification Requirements

Ratios by program.

Qualifying rate. The greater of the contract rate plus two points or the benchmark.

How income is read. Two years of employment history is expected. Employment letters must be recent and complete, pay records no more than 30 days old, and a pending raise must be confirmed in writing. Overtime and part-time income counts where it has been consistent for two years. Commission and other variable income is calculated on a two-year average or a rolling twenty-four-month period. A tax return alone is never enough — it must be supported by the assessment.

Self-employed borrowers on the documented route qualify on the lesser of the two-year average or the most recent year, with add-backs and gross-ups available to sole proprietors and partnerships but not to corporations, and retained earnings not counted. There is an enhanced insured route for businesses under two years, and a stated-income route to 90% of value on purchases only.

Maternity and parental leave is qualified at full income where the return is within twelve months, and at 60% where it is later — an explicit reduction for extended leave.

Pension income counts, including foreign pensions paid into a Canadian account and taxed here, with non-taxable pensions grossed up. Investment and registered income counts at the lesser of the recent year or the two-year average, and a recently retired borrower can use current registered income without two years of history where the asset supports it. Support income must stay under half of qualifying income. Child benefits count in full where they continue at least three years past closing. A taxable car allowance counts or offsets the car payment, and there is specific treatment for military housing differentials.

Rideshare and delivery income counts as part-time with two years of filed history. Short-term rental income does not.

Down payment. 20% minimum on uninsurable files. Gifts must be deposited at least fifteen days before closing, and spousal gifts are not permitted — a stricter line than most lenders here. Cryptocurrency, vendor take-backs and sweat equity are not accepted. Builder, realtor and broker incentives are excluded.

Closing costs at 1.5% of the purchase price, either serviced in the ratios or shown as the borrower's own funds over 90 days.

RMG Mortgages' Specialty Programs

Medical professionals program. Physicians, dentists and veterinarians recently graduated or in residency and fellowship qualify on published projected income figures by profession and year of training rather than on what they currently earn — a defined schedule rather than a case-by-case assessment, which makes the outcome predictable before applying. Foreign-trained physicians licensed in Canada are eligible. A qualifying guarantor must be a spouse occupying the property.

New to Canada. Purchases with as little as 5% down for permanent and non-permanent residents with a work permit and two years of employment history. A zero credit score is accepted, and 600 or better is accepted — but scores between 1 and 599 are not eligible. Alternative credit references stand in where there is no Canadian file. Not available in Quebec.

Low Rate Basic. A discounted, reduced-feature mortgage on insurable purchases and transfers, minimum score 630, live transactions only. It keeps the full 20/20 prepayment allowance, which several reduced-feature products elsewhere strip out. The trade shows up on early payout: the greater of 3% of the balance or a rate differential, with a partial rebate where a new Low Rate Basic mortgage funds within 90 days. Portable but not assumable.

Cashback. 1% to 3% of the loan on five-year fixed and adjustable purchases and transfers, requiring a 680 score on at least one applicant. Repayment declines by year — the full amount in the first year, stepping down to a fifth in the fifth — so a borrower who breaks the mortgage early hands most of it back.

Safeguard second mortgages. For existing RMG clients needing additional funds, registered as a standard second charge, to 80% combined, amortized as long as 30 years, minimum score 650, with guarantors required to live in the property.

Flex Down. Borrowed down payment on insured purchases, requiring 650 across all applicants and two seasoned trade lines, with no bankruptcy, judgments or tax arrears.

Rent-to-own. Insured and insurable only, where the agreement is registered and rent paid above market can count as the borrower's own down payment resources.

Minimum Credit Scores & Treatment of Liabilities

Scores.

Credit history. At least two active trade lines reporting for twenty-four months, with one held at a financial institution and a minimum size on each. A single trade line with twelve months of history can be considered where there is a strong co-borrower. A bankruptcy is not considered at all on a refinance or a second home purchase, and elsewhere only on insurable files under $1 million at 25-year amortization, discharged at least two years with two years of re-established credit through trade lines opened after discharge.

Both bureaus are used, though TransUnion only in support of Equifax rather than on its own.

Liabilities. Unsecured revolving credit at 3% of the balance; secured lines at the balance amortized over 25 years. Student loans not in repayment at 1.5% of the balance, and higher on some products; student lines at 1% where not amortizing. Instalment loans nearly repaid can be excluded. Condominium fees at half. Carrying costs on other properties count. Heating is the greater of a floor or a per-square-foot calculation. Property taxes are estimated from a percentage of value until the assessment is known.

Property tax servicing. RMG collects taxes with the mortgage payment and pays the municipality, adjusting annually. A shortfall is charged at the mortgage rate and can be repaid over time rather than in one payment.

No lender fees.

Terms & Amortization Options

Terms. Standard fixed at three to five years and adjustable at three and five, plus Low Rate Basic in fixed and adjustable form and Safeguard as a five-year fixed or adjustable.

Amortization. Minimum five years. Standard fixed and adjustable: up to 30 years, with insured high-ratio files reaching 30 only for first-time buyers and new builds. Low Rate Basic and Cashback: 25 years. Rentals: 25 years. Safeguard: up to 30 years. Transfers keep the original schedule on insured files, cap at 25 years on insurable, and 30 on uninsurable.

Payments. Weekly, biweekly, semi-monthly and monthly.

Prepayment. The standard 20/20 — up to 20% of the original principal each year and a 20% payment increase, on anniversary or renewal dates, not carried forward.

Penalties. Fixed: an interest rate differential or three months' interest. Adjustable: three months' interest. Low Rate Basic is the outlier at the greater of 3% of the balance or a rate differential, which on a large mortgage is a substantial number and is the real cost of the lower rate.

Porting. Available with an increase, a decrease or straight, with closing dates within 90 days. On a port with an increase the penalty is blended in rather than charged, and a reduction applies where current rates are taken. Not available on variable-rate, cashback, Low Rate Basic or Safeguard mortgages — which covers a good share of the product range, so portability is worth confirming at the outset.

Assumptions. Standard mortgages are assumable; Low Rate Basic is not.

Transfers in. The valuation cost is covered, the outgoing discharge fee is covered to a limit, and up to $3,000 of penalties and fees can be added to the mortgage.

Special Notes

• No home equity line of credit at all. A borrower wanting revolving equity credit needs a different lender or the Safeguard second mortgage.
• Low Rate Basic carries a 3%-of-balance penalty floor. The lower rate is real, and so is the exit cost. It is also not assumable and not portable.
• Cashback is repayable on a declining scale — all of it in year one, a fifth by year five.
• Extended parental leave is qualified at 60% of income.
• Spousal gifts are not accepted as down payment, and gifted funds must be on deposit fifteen days before closing.
• A tax return alone never proves income — it must be paired with the assessment.
• Rentals are insured and insurable only. There is no uninsured rental program, so an investor needing conventional financing has to look elsewhere.
• Gifted down payment is not permitted on rentals.
• Portfolio limits: up to five rentals with the group and ten properties in total.
• New to Canada accepts zero or 600+, but nothing between 1 and 599.
• Property standards. No leased land, hobby farms, rental pools, fractional interests, heritage homes, mobile homes, wood or post-tension foundations, mixed use, former grow operations, adult lifestyle communities, co-operatives or real estate trusts. Nothing with asbestos or vermiculite. Septic systems and cisterns are considered. Minimum sizes are 750 square feet for a house and 500 for a condominium.

Service Area

National, excluding Quebec, the Northwest Territories, Yukon and Nunavut. The Quebec exclusion is the notable one and separates RMG from MCAP, which does lend there.

Properties must be marketable with year-round access, and island properties need a year-round bridge or ferry. The borrower's right to occupy must not be restricted.

Rentals are limited to markets with active resale demand, with a lot size capped at five acres.

Rural properties are financed on a house plus fifteen acres of lending value, on parcels to fifty acres, residential or rural-residential zoning only and not a working farm. Outbuildings carry no value. Hobby farms are not eligible.

A few markets carry extra requirements — condominium purchases in British Columbia need additional building documentation, and recent condominium conversions are excluded in Alberta, Manitoba and Saskatchewan.

Loan-to-Value Treatment

The sliding scale is market- and property-specific. Above a threshold that varies by province, city and property type, lending drops to a lower share of the excess. Detached homes and townhouses carry higher thresholds than condominiums, and the Toronto and Vancouver areas carry the highest. On an expensive property the effective ratio is well below the headline, and whether the property is a condominium matters as much as where it is. Second homes and rentals are excluded from the enhanced tiering.

Rental income treatment. On the subject property, half the rent is added to income with condominium fees counted in full. On other rentals, either half the rent is added with the payment and half the fees carried, or a net rental calculation is used with a surplus added to income and a deficit carried as a liability.

Loan sizes. Uninsurable from $45,000 to $2 million, with loans above roughly $950,000 restricted to five-year terms. Low Rate Basic from $75,000. Insured and insurable to the insurer's ceiling.