Will Canada's New Mortgage Rules Affect You?

The new mortgage rules are set to take place on April 19, 2010.  Let's examine what impact these new rules will have on the consumer.

Firstly, In order to qualify for an insured mortgagage borrowers will now need to qualify for a five year fixed rate.  This translates to, the borrower must now be able to afford payments and interests of a 5 year term mortgage product, in order to qualify for a the lower payment which is generally associated with a Shorter Term or a Variable Rate Mortgage.  Variable Rate Mortgages will still be available on a term of 5 Years or less.

Secondly, the refinance ratio will now increase to 90% of a properties value as opposed to 95%.  This means that consumers will not be able to refinance more than 90% of the value of their properties.  Many would argue that this will assist homeowners in better financial planning.

And lastly, for all the Real Estate Investors out there.  The minimum down payment that will be required for Residential Investment Properties will now be 20% for government-backed insurance, on properties not lived in by their owner, which is up from 5%.  This is a brief overview of how these changes will impact your business.   


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John Siarkas

John Siarkas

CENTURY 21 Heritage Group Ltd., Brokerage*
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