If you’re considering buying a new home or refinancing/renewing your current mortgage, it would be a wise to carefully consider the following changes that will take effect on July 9th, 2012.
The Federal Government announced this morning four new clampdowns on insured mortgages that will quickly come into effect. The federal government's changes include:
- Reducing the maximum amortization period to 25 years from 30 years.
- Reducing the maximum amount of equity homeowners can take out of their homes when refinancing to 80% from the current 85%.
- Limiting the availability of government-backed mortgages to homes with a purchase price of more than $1 million.
- Fixing the maximum gross debt service ratio at 39% and the maximum total debt service ratio at 44%.
The first two changes will have the biggest impact on Canadian borrowers and real estate investors.
If you’d like to review your options or if you have any questions, please give me a call or send me an email, and I’ll be happy to discuss how these changes may affect your personal situation.