The Government of Canada announced today that it was tightening mortgage insurance rules
for the fourth time in four years. In total, four new measures were announced for new government-backed
insured mortgages.
1. The maximum amortization period was lowered from 30 years to 25 years.
2. The maximum amount that Canadians can borrow when refinancing their homes was lowered to 80% from 85% of the value of their homes.
3. Households are now being constrained to a maximum gross debt service ratio and maximum total debt service ratios of 39% and 44%, respectively.
4. Government-backed insured mortgages will now be only available on homes with a purchase price of less than $1 million.
These new rules will take effect on July 9, 2012.
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