Thursday, June 21, 2012

Mortgage Rules Tighten Up


It is reported in the Globe and Mail that finance minister Mr. Flaherty is making mortgage borrowing tougher in hopes of keeping the Canadian debt burden manageable.

Some highlights include maximum amortization for insured mortgages decrease from 30 years to 25 years, no insurance available on homes over one million dollars and the maximum gross debt service ratio will be fixed at 39% down from the current 44%. Homeowners will only be able to refinance their homes based on 80% of their equity, down from the current 85%.

Changes take effect July 9, 2012.

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