On January 17, 2011, it was announced by Jim Flaherty, Minister of Finance and Christian Paradis, Minister of Natural Resources, that there would be additional amendments to the rules for Government-Backed insured Mortgages in an additional attempt to improve and secure the Canadian Housing Market.
These changes include the following:
-Reduce the maximum amortization from 35 years to 30 years. The intent would be that Canadian Families would pay less interest on the life of the Mortgage, and allow Canadians to build additional equity in their home.
-The amount that Canadians can refinance their mortgages would be reduced from 90% to 85%. This will allow for Canadians to build equity and limit the amount of refinancing of other debt into the Mortgage.
-Government-insured Home Equity Line of Credits (HELOC) will no longer be backed. Risks associated with a HELOC be managed by the Financial Institution and not by taxpayers.
The above changes come just 1 year after changes were announced reducing the maximum refinance from 95% to 90%. In October 2008, changes were made reducing the maximum amortization from 40 years to 35 years.
The changes for the above will come into effect March 18, 2011; with the changes to the Home Equity Line of Credit taking place April 18, 2011.
Worried about how this may affect you? Call our loan specialist today-we are here to help!
