In a groundbreaking move for the Canadian mortgage market, CMLS Group, now part of Nesto, has unveiled the Aveo Flex 40, a 40-year amortization mortgage designed to offer flexibility and affordability to borrowers. Initially available in Ontario, Alberta, and British Columbia, this innovative product is expected to roll out nationwide soon, marking a major shift in mortgage lending.
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What is Aveo Flex 40?
The Aveo Flex 40 is a response to changing market conditions and the need for more adaptable lending solutions. With mortgage regulations limiting traditional lenders, CMLS is bypassing OSFI’s B-20 guidelines, which cap amortization periods for uninsured mortgages at 30 years.
“We want to restore product innovation to Canada,” says Andrew Gilmour, Senior Vice President and Head of Residential Mortgages at CMLS. “By offering a 40-year amortization, we’re giving homeowners and investors the opportunity to manage cash flow and secure their financial future.”
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Key Features of Aveo Flex 40
This unique mortgage product stands out with several key features designed to simplify borrowing and improve accessibility:
1. Extended Amortization Period
- Offers up to 40 years for repayment.
- Designed to lower monthly payments and increase affordability.
2. Simplified Qualification Process
- Brokers no longer need to meticulously audit financial statements.
- A top-line revenue approach is used, applying income-to-expense ratios based on industry norms.
3. Asset Depletion Allowed
- Applicants can use their investments (stocks, GICs, RRSPs, etc.) as income.
- Assets are divided by 120 to calculate income for mortgage qualification.
4. Flexible Credit Requirements
- Available to customers with credit scores as low as 620, and in specific cases, 600.
- Rates start at 6.84% for a 1-year term and 7.09% for a 2-year term for those with credit scores of 680 or higher.
5. Broad Eligibility
- Applicable to owner-occupied properties and rental properties.
- Designed to serve a wide range of borrowers.
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Why the Return of 40-Year Mortgages Matters
The concept of a 40-year amortization isn’t new. Once a popular option for Canadian homeowners, it was phased out in 2008 due to stricter lending regulations. With the Aveo Flex 40, CMLS is reintroducing this option as a way to address rising housing costs and tighter lending requirements.
“This product provides stability and cash flow flexibility,” says Gilmour. “We believe it’s a reasonable way to approach the market and offer a solution to borrowers who might otherwise have limited options.”
Strengthening Broker Relationships with New Partnership Program
CMLS is also reintroducing itself to brokers with a revamped partnership program that prioritizes simplicity and transparency.
Key Highlights:
- Non-Prime Volume Counts Toward Targets
- Brokers can include non-prime deals, such as Aveo Flex 40, in their status targets.
- Retroactive Volume Bonuses
- Bonuses apply from the first deal and are based on last year’s performance, placing brokers in tiers of $5M, $15M, or $25M.
- Enhanced Compensation Structure
- Brokers can earn up to 120 basis points with a 70% approval-to-funding ratio.
- Dedicated Underwriting
- Brokers who qualify for any tier gain access to a streamlined underwriting process.
“We’re sending a clear signal to brokers that we’re ready to do business,” says Gilmour. “We’ve raised compensation, simplified processes, and ensured that every deal brokers send us is eligible under the new structure.”
What’s Next for Aveo Flex 40?
With plans to expand the Aveo Flex 40 across Canada, CMLS is positioning itself as a leader in innovative mortgage solutions. By combining extended amortization periods with simplified qualification and a revamped broker program, CMLS aims to capture significant market share and address the growing needs of Canadian borrowers.
“This isn’t just about launching a product,” says Gilmour. “It’s about reshaping the way Canadians think about mortgages and providing the tools they need to achieve homeownership.”
Is Aveo Flex 40 Right for You?
For borrowers seeking affordability, flexibility, and straightforward qualification, the Aveo Flex 40 might be the perfect fit. Contact your mortgage broker or visit CMLS to learn more about this revolutionary new offering.
CMLS has taken a bold step with Aveo Flex 40, proving that innovation and accessibility can still thrive in a challenging lending environment. This product could very well set the tone for the future of Canadian mortgages.
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