Rules change for home buyers
OTTAWA—Finance Minister Jim Flaherty is tightening mortgage rules to crack down on speculators and discourage homeowners from taking on too much debt.
The finance minister says all borrowers will need to meet stiffer criteria to take out mortgages. In order to qualify for an insured mortgage, borrowers will have to meet the standards for a five-year fixed-rate mortgage — up from the current standard of three years. He’s also raising the down payment that borrowers must pay for speculative investments. If prospective home buyers want to purchase a property where they will not be living, they will have to come up with a 20 per cent down payment. Tighter restrictions are imposed on how much money people can borrow against their houses. Instead of being able to borrow 95 per cent of the value of their property, the limit will now be 90 per cent.
The new rules are expected to come into force on April 19
Posted by Liba Radovski-Levin
on February 18, 2010