Oh The Mortgage Rules They Are a-Changin’

As of July 9th, 2012, a number of rule changes are being implemented in the Canadian mortgage market.

The changes to the mortgage rules in the Canadian market include, but are not limited to:

• The reduction of the maximum amortization period to 25 years from 30 years on CMHC insured (otherwise known as “high-ratio”) mortgages.
• Lowering of the maximum amount Canadians can borrow when refinancing against their home to 80% from 85% of the value of their homes.
• Changing the the maximum gross debt service (GDS) ratio at 39% and the maximum total debt service (TDS) ratio at 44%.
• Homes with a purchase price of more than $1 million will no longer be insured by the CMHC; requiring buyers to have a 20% down payment to make such a purchase.

As always, if you have any questions regarding the mortgage rule changes taking place in Canada, do not hesitate to contact your local mortgage broker with your questions or comments.