The Federal Government announced this morning four new clampdowns on insured mortgages that will quickly come into effect on Monday, July 9th, 2012.
These changes include:
- Reducing the maximum amortization period to 25 years from 30 years
- Reducing the maximum amount of equity homeowners can take out of their homes when refinancing to 80% from the current 85%
- Limiting the availability of government-backed mortgages to homes with a purchase price of more than $1 million
- Fixing the maximum gross debt service ratio at 39% and the maximum total debt service ratio at 44%
The first two changes will have the biggest impact on Canadian borrowers.
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