New Mortgage Rules in Effect Today

Today, March 18, 2011 the new Government of Canada mortgage rules go into effect. Here is a summary of what to expect:

Amortization Periods

Mortgage borrowers, whether buying, refinancing, or renewing, will be subject to a maximum 30 year amortization period on all insured mortgages. That is, if your mortgage is insured by CMHC, Genworth, or Canada Guaranty, you will only be able to amortize your mortgage over 30 years. This is down from previous highs of 35 years and 40 years over the past few years.

The goal here is to ensure that people make responsible borrowing decisions and don’t pay too much in interest over time.

Keep in mind that there are a couple of lenders out there who will continue to offer 35 and 40 year amortizations on conventional mortgages, so if you want that, check with us!

Refinance Loan-To-Value (LTV)

Going forward, if you need to refinance your mortgage you will only be able to access up to 85% of the value of your home under the government’s new insured-mortgage rules.

Exceptions may apply if private lending is used, but the cost of doing so may be considerable.

Hopefully this helps you to understand the new Canadian Mortgage Rules, however, if you have any questions, don’t hesitate to contact one of our Mortgage Brokers and they can answer your questions.