Today Canadian Finance Minister Jim Flaherty announced a few significant changes to the Mortgage lending rules.
Changes to minimum down payment have NOT been changed. This means Canadians are still able to purchase their primary residence with as little as 5% down.
The first change Flaherty announced is that the maximum amortization has been reduced from 35 years down to 30 years. So if you are purchasing a home with less than 20% down and need to have your mortgage insured the maximum length of the amortization of that mortgage will be 30 years.
The second announcement made today deals with how much equity you can borrow against the value of your home. The maximum amount you can borrow against changes from 90% to 85%.
The above changes will take place March 18th.
The government will also remove its backing for home-equity lines of credit. This change will take place on April 18th.
Steve Roblin