Changes to high-ratio mortgages announced by the government.
Rule Changes: Round 4
Finance Minister Jim Flaherty has announced the fourth set of mortgage rule changes in the last four years, to take effect 18 days from now (July 9, 2012).
Those with less than 20% down payment will not longer be able to get a prime mortgage with:
- a 30 year amortization, the maximum will now be 25 years
- a refinance to 85% ltv, the maximum will now be 80%
In addition to these changes, the government will:
- Limit maximum gross debt service (GDS) and total debt service (TDS) to 39% and 44% respectively (Currently, GDS does not apply to qualified borrowers with credit scores of 680+)
- Ban Mortgage Insurance on properties over $1 million
Flaherty refers to these changes as a “judgment call” meant to “lower risk” for taxpayers and curb excessive household debt, which is Canada’s biggest economic risk. The above initiatives are in addition to pending OSFI mortgage restrictions, which will dampen home-buying demand even further. (OSFI’s final guidelines are expected later today.)
These are significant changes to Canada’s lending landscape and I’ll weigh in on the potential outcomes and implications throughout the day on my blog. As always, if you have any questions or concerns, call me now at (778) 233-2377.
Aleem – The Mortgage Specialist – Vancouver
The Recent Bank of Canada Rate Increase- one broker’s thoughts
What about this recent Bank of Canada Interest Rate Increase? If your discount from Prime -which is now now 3.20%- is 0.50% or deeper – then the variable rate product remains a really great place to be. If your discount from Prime is 0.25% or less, then depending on which lender you are with you may consider…
Employment status Impacting Your Mortgage Qualification
If you are applying for a mortgage, the chances are that you are feeling confident about your current employment status and your ability to find a similar position if need be. Your employment is a key aspect of being approved for a mortgage…
The Truth about mortgage pre-approvals
Are we Pre-Approved? Not what you might think it means… Many clients think that having a mortgage pre approval puts them in a position to write offers on properties without inserting a ‘subject to receiving and approving financing’ clause in their contract.
April Real Estate Board of Greater Vancouver News
Here is a Quick Summary of the April stats for Real Estate In Greater Vancouver.
2017 Vancouver Real Estate Market
For quite some time now there has been a very limited supply of properties on the market and most Realtors that I speak with on a regular basis are starting to have buyers lineup. With very few properties to show these buyers, we are beginning to see similar trends that we saw a year ago.
Two main Reasons Rates Will Not Hit 5%
High borrowing rates are a relic. Canadian regulators may soon force borrowers to qualify at interest rates two percentage points above the contract rate. With many posted mortgage rates now approaching and even surpassing 3.00% (depending on the term), this means borrowers will soon need to show they can afford payments based on rates…
Value of Mortgage Brokers Greater Than Ever
Mortgage Rule Changes have made Mortgage Brokers even more invaluable. In October of 2016, the entire Country was surprised by reports of considerable changes to mortgage rules announced by the Canadian Government. The Department of Finance Canada announced new mortgage rules that have since had a tempering effect on the market.
Canadian Mortgage Rates- How they are influenced by the U.S.
In the midst of the financial crisis, America’s equivalent of our central bank – the Federal Reserve- opted to lower its short-term overnight interest rates down to zero.Things did not stop there. The goal all along was to lower longer term interest rates, which are market driven and not directly influenced by the central bank…
BC Home Partnership Program
By now I’m sure that you have heard about the announcement by the provincial government yesterday surrounding down payment. This is some good news, although with some challenges that need to be addressed, and once the dust settles, will likely have a very small impact- but still good news nonetheless…
Did Buyers In August Overpay Just To Get a Low Rate?
I came across this article published in the Globe and Mail which I thought did a great job of explaining the phenomenon of people rushing out to buy a house to take advantage of lower rates. It just so happens that many people did this in August. Rates – when compared to historical levels…
If you would like more information or a free consultation contact Aleem below, and as a Certified Mortgage Specialist let me help you get the home of your dreams. Great Mortgages, Made Simple
