New Canadian Mortgage Rule - 30 Year amortization & 85% LTV, effective March 18, 2011
Jim Flaherty, Minister of Finance announced prudent adjustments to the rules for government-backed insured mortgages.
Rules for amortization and loan to value (LTV), effective March 18th, 2011 are as follows:
• Reduce the maximum amortization period to 30 years from 35 years at high ratio (>80% LTV)
• 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.
Rules on Line of Credit (HELOC), effective April 18, 2011, as follows:
•Withdraw government insurance backing on lines of credit secured by homes, such as home equity lines of credit, or HELOCs. This means you will not be able to obtain line of credit at 80% LTV or higher (some lenders cap loan to value for HELOC at 75% LTV or lower before this rule anyway)
For further questions, dont’ hesitate to email us at cchien@mortgagegrp.com about how this rule may affect your buying decision and qualifications.
Full story and source: Department of Finance Canada