New Federal Rules for Home Financing
QUALIFYING FOR A FIVE-YEAR RATE
The adjustments to the mortgage framework will require mortgage insurers to ensure that new borrowers qualify for a five-year fixed rate mortgage when calculating the gross debt service and total debt service ratios. The measure is intended to protect Canadians by providing them with additional flexibility to support mortgage payments at higher interest rates in the future.
LIMIT THE MAXIMUM REFINANCING
Borrowers seeking financial flexibility can currently refinance their mortgage and increase the amount they are borrowing on the security of their home up to a limit of 95% of the value of the property. The adjustment will lower the maximum amount of the mortgage loan in a refinancing of a government-backed high-ratio mortgage loan to 90% of the value of the property, consistent with the principle that home ownership is a tool for savings.
DISCOURAGING SPECULATION
This measure will require a minimum down payment of 20% for government-backed mortgage insurance on non-owner-occupied properties purchased for speculation. At present, borrowers may purchase a residential property with a 5% down payment. The change will require a 20% down payment for small non-owner-occupied residential rental properties. Borrowers purchasing owner-occupied residential properties which also include some rental units (such as a duplex) will still be able to access government-backed mortgage insurance with a 5% down payment.
Your Realtor & the Flu
Real Estate Statistics 101
Energy Staging Your Home
Head Start on a Successful Real Estate Career
Questions about Real Estate? Contact us at:
________________________________________________________________________________________________
Office: 905.845.9180 | Fax: 905.845.7674 | millerrealestate@century21.ca
Oakville Real Estate, Burlington Real Estate, Milton Real Estate, Mississauga Real Estate
www.century21miller.com www.careersinrealestate.ca
Follow us on the following sites:
www.century21.ca generates 3x more unique visitors per Sales Representative site
Posted by Daniella Aitken
on February 17, 2010