Federal Finance Minister Jim Flaherty has announced prudent changes to mortgage insurance rules intended to come into effect on April 19th, 2010. They are as follows:
- All borrowers must meet the standards for a five year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term.
- The maximum amout one can withdraw in refinancing their mortgage will be reduced to 90% from the current 95% of the value of one's home.
- Non-owner occupied properties will requie a minimum down payment of 20%. There were no changes to down payment requirements or lengths of amortizations for owner-occupied residences.
The Bank of Canada ia also being urges to maintain its pledge to keep its key policy rate at 0.25% until July but should then embark on rate hikes.