New Mortgage Rules For Canada! Changes everyone must know!

New Mortgage Rules for Canada in 2011

1. With The New Mortgage Rules In Canada, Maximum Amortization Period Goes Down To 30 Years

With the New Mortgage Rules in Canada The Amortization (the time it takes to pay off your entire mortgage) will drop from the current 35 yrs to a max of 30yrs

Typical mortgages in Canada have terms of five years or less during which a specific fixed or variable interest rate will apply, and the mortgage can be renewed at the end of the term.

New Mortgage Rules for Canada will reduce the maximum amortization period from 35 years to 30 years. A lower amortization period results in an increase in the monthly payment.

2.With The New Mortgage Rules In Canada, Maximum Loan to Value for Refinances will be Reduced from 90% to 85%

With the New Mortgage Rules In Canada, Borrowers can still refinance their mortgage and increase the amount of the loan secured against their home, but today's New Mortgage Rules for Canada, changes will reduce the limit on refinancing from 90 per cent to 85 per cent of the value of the home. Refinancing lowers the borrower's equity in their home. Reducing the maximum loan-to-value ratio on refinancing will encourage Canadians to keep at least 15% equity in their home.

3. With The New Mortgage Rules In Canada, The Government will No Longer Offer Insurance for Lines of Credit

With the New Mortgage Rules in Canada you can no longer get goverment backed insureance on lines of credit. Because a line of credit doesn't have a principle reduction built into the payment, you could go on forever simply making interest only payments never reducing your balance. In view of this, the government figures it's too risky to insure.

Will The New Mortgage Rules Effect Home Values Like The One In This Picture?

Heres the answer to your question on New Mortgage Rules In Canada and home values!

New Mortgage Rules For Canada

The Canadian government has introduced These New Mortgage rules for Canada, governing mortgages in an effort to keep home-buyers from being harmed when mortgage rates increase. This will effect home buyers with certain costs and what they might be able to afford, when purchasing a home! However in the aftermath of the global market meltdown and plunging Real Estate values in many countrys, Canadas New Mortgage Rules are a step in making sure that Canada does not make the same mistakes which happened in the US.

The Bank of Montreal issued a press release regarding the New Mortgage Rules saying, "While we do not believe that Canada faces a housing bubble, we fully support the minister's actions. Given the prospect of higher interest rates and the recent run-up in housing prices in some markets across Canada, the measures announced today are prudent."

How do these New Mortgage Rules for Canada effect you?

If you would like to talk to A Real Estate profesinal and discuss this or what you should do in the current market, give The Property Finders a Call!

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