Federal Finance Minister Jim Flaherty announced changes to come into effect on April 19, 2010.
1: All borrowers must meet standards for a five year, fixed rate mortgage.
For example, if someone chooses a variable rate mortgage at today's low rates, they will have to be able to handle the payment of the current five year rate. They won't have to actually make the higher payment required by the five year rate. They will just have to qualify to carry it.
2: The Government is lowering the maximum amount you can withdraw when refinancing.
The maximum amount one can withdraw in refinancing their mortgage will be reduced to 90% from the current 95% of the value of your home. This is for refinancing only, not purchases. Purchasers can still borrow up to 95% of the home value.
The 35 year amortization term remains unchanged.
3: Non-owner occupied properties will require a minimum down payment of 20%
When buying a property you are not going to live in, you will have to put a down payment of a minimum of 20% ( up from 5% ) to qualify for mortgage insurance. This applies to investn=ment properties of up to 4 single family units. This will not affect commercial lending for multi-residential with 5 units and up. The same 85% financing will remain in place.