Federal Government Announces New Mortgage Rules

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

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