Changes to Mortgage Rules – A message from CREA
As anticipated in CREA’s Call to Action, the government announced three loan financing changes designed to address concerns about increasing levels of household debt. The government announcement can be found at www.fin.gc.ca/n11/11-003-eng.asp.
The government has reduced the maximum mortgage amortization period from 35 to 30 years. They have also reduced the maximum amount of the value of a home that can be re-financed from 90 per cent to 85 per cent. Finally, government insurance will no longer be available to financial institutions wishing to insure home equity lines of credit.
It is important to note that the government did not increase the minimum down payment, which was under consideration. And the reduction of five years to the amortization period is understood, given there was a possibility of a larger reduction.Â
Thanks to all those who recognized the urgency of CREA’s Call to Action and wrote their Member of Parliament.