Government Changes Mortgage Rules

The Honourable Jim Flaherty, Minister of Finance, announced this morning that there will be changes made to the rules that regulate government-backed insured mortgages. The new rules will take effect on April 19th, 2010.

The changes are as follows (taken from the Government of Canada website):

• Require that all borrowers meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term. This initiative will help Canadians prepare for higher interest rates in the future.
• Lower the maximum amount Canadians can withdraw in refinancing their mortgages to 90 per cent from 95 per cent of the value of their homes. This will help ensure home ownership is a more effective way to save.
• Require a minimum down payment of 20 per cent for government-backed mortgage insurance on non-owner-occupied properties purchased for speculation.

To read more, visit the Government of Canada website or click HERE.

Check back tomorrow to watch our video blog on how this will affect you.