TORONTO — New mortgage rules go into effect today in Canada but a recent survey suggests many people are unfamiliar with the changes.
Starting Monday July 9th, 2012, lenders can only issue home equity loans up to a maximum of 80% of a property’s value — down from 85%.
The maximum amortization period also drops to 25 years from 30 years — giving borrowers less time to repay the debt in full.
In addition, the federal government is capping the maximum debt ratios for households and limiting government insurance to mortgages on homes with a purchase price of less than $1-million.
A poll conducted by Pollara for Bank of Montreal found only about half of those surveyed were familiar with the changes brought in by the federal government.
And only 45% of those surveyed June 29 to July 4 were aware that the maximum amortization period has been shortened by five years.
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