New Mortgage Rules in Effect

Ottawa is changing mortgage rules again to make it more difficult for Canadians with limited savings to buy homes, or obtain loans.

As of June 21, 2012, these are the new changes to mortgage rules:

#1)  The amortization period on a mortgage will be dropped from the current 30 years to 25 years.
The amortization period is the estimated number of years it will take to pay off your mortgage entirely. The longer your amortization is, the lower your mortgage payments will be, but the higher the total amount of interest you'll pay over the life of the mortgage

#2) The government is limiting refinancing loans to 80 per cent of the value of a home, from the current 85 per cent.

#3) You will need to have a 20% down payment to purchase a home worth more than $1 million or have to seek private insurance.

View the CBC News report on the new mortgage changes.

New Mortgage Rules Effective Today

Don't forget homebuyers, Canada's new mortgage rules go into effect as of today, March 18, 2011.


In case you've missed all the discussions, the three new rules are as follows:


1) The maximum amortization period has been reduced to 30 years from 35 years for government-backed insured mortgages with loan-to-value ratios of more than 80 per cent.


2) Ottawa will lower the maximum amount Canadians can borrow in refinancing their mortgages to 85 per cent from 90 per cent of the value of their homes.


3) Ottawa will withdraw government insurance backing on lines of credit secured by homes.

Finance Minister Jim Flaherty announces Canada's new mortgage rules in January 2011.