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Last week Finance Minister Jim Flaherty announced some changes in mortgage rules that will have an impact on the loan amount that some borrowers qualify for. Some of the key changes are:
- Borrowers need the appropriate income level to qualify for payments using the 5 Year fixed rate even if they plan on taking a lower variable rate for their mortage
- When refinancing a home only 90% of the assessed value of the home can be borrowed, down from 95%
- When financing an investment property through CMHC (Canadian Mortgage & Housing Corporation), investors will now have to put 20% down as oppossed to a minimum of 5%
While these changes will have some impact on the Market, Flaherty did not decrease the maximum amortization period which now stands at 35 years and did not increase the minimum down payment which stands at 5%. Only time will tell how the changes above affect the Real Estate Market.
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