New Mortgage Regulations Now in Effect
Home buyers and sellers should be aware that there has been a further tightening of Canadian mortgage regulations that came into effective July 9th. In the June 21st announcement from the federal government, Finance Minister Jim Flaherty stated that the new regulations were introduced “to keep the housing market strong, and help to ensure households do not become overextended.”
Changes include the maximum amortization period being reduced to 25 years from the previous 30 years. Also, the maximum amount of equity homeowners can take out of their homes in a refinancing is being reduced to 80% from 85%. These new mortgage regulations echo earlier reductions of amortization period and lowered refinancing maximums that came into effect last year.