CANADIAN MORTGAGE INSURANCE RULE CHANGES

March 4, 2010

Further to the recent insurance guideline announcement, mortgage lending rules are tightened effective April 19, 2010.

Key interest to Canadian mortgage lenders is the “definition of the five-year standard rate used for mortgage qualifying”. The government is currently working on that definition, once those details are confirmed, it will be posted here on this blog.

The changes being implemented are prudent and will ensure long term stability in the real estate market. The changes are:

  1. All borrowers must meet the standard for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term;
  2. The maximum loan to value will be reduced to 90% from the current 95% on refinances of existing owner occupied homes;
  3. Non-owner occupied properties will require a minimum down payment of 20%.

There were no changes announced to the down payment requirement or length of amortizations for owner-occupied residences. Full implementation of the above changes is expected by April 19th, 2010.

Kindly contact me (Elsie Tse) at 604-716-3369 or Email Me 

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