Government of Canada Mortgage changes January 17 2011


The Government of Canada announced today that it is changing some of the rules for obtaining a mortgage. These rule changes were not announced with the budget. There had been rumors about the first change but not the rest!
Changes are:
1) Maximum amortizations will be reduced from 35 years to 30
2) Maximum Loan to Value for refinances will be reduced from 90% to 85%
3) The government will no longer offer insurance for Lines of Credit
For the most part these changes will have minimal effect and we can all breathe a little easier as it could have been worse. Also note that these changes should only affect mortgages with a loan to value of greater than 80%. What lenders do is yet to be seen. The adjustments to the mortgage insurance guarantee framework will come into force on March 18, 2011. The withdrawal of government insurance backing on lines of credit secured by homes will come into force on April 18, 2011.

Written by Bob Alexander - Verico Canada Mortgage Direct