New Mortgage Rules
On June 21, 2012 the Government of Canada announced new rules regarding government-backed insured mortgages. These new rules only apply to mortgages with less than 20% down payment.
Here is a summary of the new mortgage rules:
- Reduce the maximum amortization period to 25 years from 30 years. This will reduce the total interest payments made on your mortgage, helping you build up equity in your home more quickly and pay off your mortgage sooner.
- Lower the maximum amount Canadians can borrow when refinancing to 80 percent from 85 percent of the value of their homes
- Fix the maximum GDS to 39% and TDS to 44% when qualifying for a mortgage
- Properties purchased at over 1 million dollars are no longer eligible for mortgage insurance