Mortgage Changes Target ‘Reckless’ Buyers

Some recent changes taking place with regards to Canadian Mortgages. 


Jim Flaherty, the Finance Minister, says he is targeting "reckless" speculators who buy up multiple condominium units in the country's biggest cities with new rules introduced yesterday that will make it tougher for Canadians to get a mortgage.


*Borrowers must qualify for a five-year fixed rate mortgage instead of a three-year loan when calculating gross debt service and total debt service ratios.

*Refinancing will be capped at 90% for government-backed high-ratio mortgages versus 90% previously.

*A down payment of 20%, instead of 5%, will be required for government-backed mortgage insurance on non-owner-occupied properties purchased for speculation.


*The difference between a three-year mortgage rate and a five-year mortgage rate is currently in the range of about 50-100 basis points. The average house in Canada costs $337,000, which means that this change will require that mortgage applicants have the capacity to absorb an extra $2,500 per year in mortgage costs than in the past, according to calculations by Eric Lascelles at TD Securities. Effectively, the minimum household income cut-off for Canadian mortgage applicants is now about $5,000-8,000 higher than it was previously, to fulfill the new rule.

To read the whole article found in the Financial Post go to:

For specific questions contact your mortgage professional or

Steve Chittick @ Tel: 905-690-6834 or Cell: 905-407-7071

If your looking for to buy or sell please contact Brad Stevenett @ 905-407-7381 or @


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Brad Stevenett

Brad Stevenett

Sales Representative
CENTURY 21 Miller Real Estate Ltd., Brokerage*
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