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Federal Finance Minister Jim Flaherty announced changes to mortgage insurance rules which are set to come into force on April 19th, 2010.
This means the government will adjust the rules for government-backed insured mortgages as follows:
1) Require that all borrowers meet the standards for a five-year fixed-rate mortgage even if they choose a mortgage with a lower interest rate and shorter term. This initiative will help Canadians prepare for higher interest rates in the future.
2) Lower the maximum amount Canadians can withdraw in refinancing their mortgages to 90% from 95% of the value of their homes. This will help ensure home ownership is a more effective way to save.
3) Require a minimum down payment of 20% for government-backed mortgage insurance on non-owner-occupied properties.
There were no changes to down payment requirements or length of amortizations for owner-occupied residences.
Click here for additional details on the changes.
DLC supports the Government's measures as a prudent and balanced approach.
We've seen a rise in consumer debt and we anticipate interest rates will go up in the future, so it makes sense to put policies in place early to protect consumers.
These changes will help moderate the market without being too severe. They help protect first-time home buyers.
2 comments:
In my opinion, these adjustments to the mortgage rules will prove beneficial to every Canadians who are getting their mortgages especially to people who wants to ensure home ownership.
If these rules were adjusted back then, I think it had encouraged more people to engage in mortgage investment . I just hope that the Canadian mortgage company (Calgary) I am working at would inform people about these adjustments.
My concern with all these rule changes is that there already is an unspoken rule if buying a country home that you must already pay the 10% down instead of 5% like city dwellers, so does that mean that country people will have to pay 30% down as opposed to 20% city? I think I have a very valid question. I used to owrk in the real estate industry do I do know what I am saying.
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