Mortgage Rule Changes That May Affect You

OTTAWA - Finance Minister Jim Flaherty is tightening mortgage rules to make it harder for people to buy or borrow on their homes.

Flaherty says changes to CMHC rules will cut the maximum amortization period for mortgages to 25 years from the current 30 years.

The changes will also limit refinancing loans to 80 per cent of the value of a home, from the current 85 per cent.

The latest moves are part of a string of initiatives undertaken recently by the federal government to slow the accumulation of debt by Canadian households, which reached a record 152 per cent of income in the fourth quarter of last year.

This will mark the fourth time Ottawa has tightened mortgage rules since 2008.

Central bank governor Mark Carney has been warning for several years that some Canadians are getting in over their heads with debt, and that they could face problems once interest rates — which sit at historic lows — start rising or if there is a second economic crisis.

From the Canadian Press

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