Jim Flaherty moves to cool the mortgage boom (Globe & Mail Feb 17, 2010)
Effective April 19, 2010, three new rules will impact the ability to secure a mortgage.
Change 1: Qualification
Borrowers must qualify for a five year fixed rate mortgage, even if they opt for a lower variable rate. Currently, buyers must qualify for the higher of a three year fixed rate or variable rate mortgage. A buyer of a $337,000 home would require $9,200 more in annual income to qualify. Abuyer of a $200,000 home would need to earn $5,400 more.
Change 2: Refinancing
Lower the maximum amount a homeowner can withdraw when refininancing a mortgage, to 90% from 95% of the value of the property. People effected may be those who purchase large consumer goods purchased through mortgage refinancing.
Change 3: Speculation
Increase the required down payment to 20% from 5% for insured mortgages obtained for purchasing speculative housing investments not occupied by the owner. This could affect up to 15% of the mortgage deals.