Canadian Mortgage Rule Changes
The rules for government-backed insured mortgages have just changed (the change went into effect on April 19th, 2010).
The changes are briefly outlined in Canada Takes Action to Strengthen Housing Financing, a document on the Department of Finance Canada's web site.
The essential changes are:
- All borrowers must meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term.
- The maximum amount Canadians can withdraw in refinancing their mortgages is now 90 per cent of the value of their homes (up to this point it has been 95 per cent).
- A minimum down payment of 20 per cent for government-backed mortgage insurance on non-owner-occupied properties purchased for speculation is now required.
The Canada Mortgage and Housing Corporation includes a page on the new rules with a little more detail.
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