Federal Government's Mortgage Insurance Changes
Federal Finance Minister Jim Flaherty announced changes to mortgage insurance rules intended to ensure the stability of Canada's housing market. Effective March 18th, 2011, it will become harder to buy a new home or consolidate debt into your mortgage.
These measures include:
- Amortization period capped at 30 years on insured mortgages over 80% loan to value.
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The government will no longer insure home-equity lines of credit, or HELOCs effective April 18.
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Maximum refinancing reduced to 85% from 90% LTV.
There are NO changes to down payment requirements. The minimum down payment, at 5%, will remain as is. Further, there are no plans to target condominium purchases by requiring monthly condo fees be added to the list of expenses that is measured against income to decide whether a buyer can afford a mortgage.
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