This morning, the Federal Finance Minister announced further changes to Canada's mortgage insurance rules. Four measures were announced:
Mortgage Rules are a Changing!!
Jun 21, 2012 - 9:16:36 AM
Amortizations reduced to 25 years
Refinancing limited to 80%
Properties purchased at over $1 million no longer eligible for mortgage insurance
GDS and TDS set at 39% and 44%
It is a belief that Canadians understand the importance of paying down their mortgages. These changes, together with new OSFI underwriting guidelines - also to be announced today - may precipitate the housing market downturn the government so desperately wants to avoid.
The changes take effect July 9, 2012.
To put this into perspective with your buyers who are on the fence, using an average annual income of $63,000, this changes their buying power by roughly about $35,000. They can still buy with 5% down as the 80% limit only applies to refinances.
What this means is that if people need that 30 year amortization they have to have their mortgage applications submitted to the insurance companies (CMHC, Genworth, Canada Guarantee), not the lenders before July 9, 2012.
For more information about the changes and to get your clients the best advise have them call their Mortgage Specialist TODAY!!
To review this morning's Globe and Mail article
To review the government press release and backgrounders
LendingMax - Mortgage solutions for Canadians.