Federal Finance Minister Jim Flaherty announced today changes to mortgage insurance rules effective April 19, 2010. Although there was a lot of press on this topic, it is important to know that there were no changes to down payment requirements or length of amortizations.
The key issues are as follows:
All borrowers with less than 20 % down 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 one can withdraw in refinancing their mortgage will be reduced to 90% from the current 95% of the value of one's home;
Non-owner occupied properties will require a minimum down payment of 20%.
The Government is concerned that some borrowers who are taking out variable-rate mortgages will struggle with their monthly interest rates should interest rates rise. This concern is judicious and the government is taking prudent measures.
If you have any questions do not hesitate to contact me or the rest of your Re/Max Escarpment "in-house" team.
Thanks,
Jimmy
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