New Mortgage Rules Take Effect July 9, 2012
This is a preview of the new mortgage rules that will affect people applying for a home Mortgage in Canada. These rule changes were meant to slow down the housing market and to also reduce people’s debt loads before taking on large loans.
The new mortgage rules are as follows on the effective date (July 9th, 2012) changes to Government Backed Insured Mortgages:
- Amortization Period is REDUCED to 25 years for high ratio applications. Banks can continue to offer 30 year amortization on LTV’s 80% or less.
- Refinancing is REDUCED from 85% LTV to 80%.
- Limit GDS to 39% and TDS to 44%.
- Maximum Purchase Price for government backed mortgage insurance is $1 Million. Homes above $1 Million must have 20% downpayment.
Please note: Albeit these adjustments are in force July 9th, exceptions have been allowed on binding Purchase & Sale financing & refinancing agreements where the application is made prior to July 9th. Any mortgage insurance application received after June 21st and before July 9th, that do NOT conform to the new guidelines must fund by December 31st, 2012.
To learn more about the new mortgage rules contact Françoise at 647-204-6307 or click here to connect with mortgage agent, Kristen Gignac.
Leave a Reply