Earlier today, changes were announced by the Minister of Finance regarding the standards governing government-backed insured mortgages. Here is a synopsis of the changes that are being implemented:
- Reducing the maximum amortization period was reduced from 30 years to 25 years;
- Lowering the maximum amount Canadians can withdraw when refinancing their mortgages to 80 per cent from 85 per cent of the value of their homes;
- Fixing the maximum gross debt service ratio at 39 per cent and the maximum total debt service ratio at 44 per cent; and
- Limiting the availability of government-backed insured mortgages to homes with a purchase price of less than $1 million.
The changes announced today will come into effect on July 9, 2012. Details of the announcement can be found here:
If you are planning to buy or sell a home in the near future and would like to discuss what the implications of these changes will mean to you. Feel free to give me a call today.