The Government of Canada has announced changes to government backed insured mortgages, effective July 9th 2012.
The New Rules are as follows:
- Amortization period is REDUCED to 25 years for high ratio applications. Banks can continue to offer 30 year amortization on LTV’s 80% or less.
- Refinancing is REDUCED from 85% LTV to 80%.
- Limit GDS to 39% and TDS to 44%.
- Maximum purchase price for government backed mortgage insurance is $1 million. Homes above $1 million must have 20% down payment.
Although these adjustments are in force July 9th, exceptions have been allowed on binding Purchase & Sale financing & refinancing agreements where the application is made prior to July 9th.
Here is an article from the Golbe and Mail: http://www.theglobeandmail.com/report-on-business/economy/housing/flaherty-clamps-down-on-mortgage-rules-to-cool-overheating-market/article4359232/