Friday 22 June 2012

New Canadian mortgage lending guidelines announced

Full Mortgage Brokers City response to changes to Canadian mortgage lending rules

The much anticipated announcement of the new guidelines for Canadian mortgage lending occurred on June 21st, sparking a media frenzy. Jim Flaherty announced the government is setting forth four major changes, which will come into effect on July 9th, 2012. These changes include:
  • Reducing the maximum amortization period on mortgages with default insurance from 30 years to 25.
  • Lowering the maximum amount Canadians can borrow when refinancing from 85% to 80% of the value of the home.
  • Fixing the maximum gross debt service ratio at 39% and the maximum total debt service ratio at 44%.
  • Limiting the availability of government-backed insured mortgages to homes with purchase prices under $1 million.
In this video, Mortgage Broker Frank Napolitano addresses the above changes, how they will affect the average Canadian borrower and how the advice of a qualified Mortgage Broker can help. Frank also discusses the changes put forth by the Office of the Superintendent of Financial Institutions regarding Home Equity Lines of Credit, which were announced the same day.

Those with further questions or concerns should feel free to consult a professional Mortgage Broker in Canada.

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