The Federal Government announced this morning further changes to Canada's mortgage insurance rules which come into effect on July 9th, 2012.
These changes include:
- Reducing the maximum amortization period to 25 years from 30 years
- Reducing the maximum amount of equity homeowners can take out of their homes when refinancing to 80% from the current 85%
- Limiting the availability of government-backed insured mortgages to homes with a purchase price of less than $1 million (homes over $1 million will require a minimum 20% downpayment)
- Fixing the maximum gross debt service ratio at 39% and the maximum total debt service ratio at 44%
To review the government press release and backgrounder click here