New Mortgage Rules Come To Canada
February 16th, 2010 Posted in Real Estate and Mortgage
New Changes To Mortgage Rules
Canadian Finance minister Jim Flaherty announced new mortgage rules Tuesday, February 16, 2010 to discourage homebuyers from taking out mortgage they can’t afford. Unlike the U.S., Canada has not seen any housing market turmoil and the mortgage crisis has not been able to filter into Canada. There is no evidence of a housing bubble and these prudent steps are being taken to prevent one – according to Flaherty. Let’s look at the three major elements that have changed of these new mortgage rules:
- All borrowers will have to meet a five year fixed rate standards (even if you are taking a variable rate mortgage lesser than five year)
- Canadians can withdraw maximum 90 per cent of the home value when refinancing mortgages ( from 95 per cent)
- From now on, real estate investors will have to come up with a minimum 20 percent down payment (from 5 per cent)
Elements That Have Not Changed
- Minimum down payment requirement is still 5 per cent
- Amortization period is still 35 years
New mortgage rules will become effective April 19, 2010. Bank of Canada is expected to raise the record low interest rate shortly, and now along with these new rules, it is hard to predict how the housing market and economy will react. Only time will tell.
More Posts:
Canada/Toronto Archive
Canada Exceeds Economic Expectations
Canada’s Personal Finance Blog
2 Responses to “New Mortgage Rules Come To Canada”
By The Rat on Feb 19, 2010
Nice thread. I think the changes for investors having to cough up 20% for a down payment will have a lot of people potentially trying to close a few deals before the regulations kick in this spring.
By Karen Cayamanda on Aug 22, 2010
In a way this is good since it would require other people to put more of their savings towards an investment.