New Mortgage Rule Changes coming March 18, 2011
The new measures: Reduce the maximum amortization period to 30 years from 35 years for new government-backed insured mortgages with loan-to-value ratios of more than 80 per cent. This will significantly reduce the total interest payments Canadian families make on their mortgages, allow Canadian families to build up equity in their homes more quickly, and help Canadians pay off their mortgages before they retire.
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. This will promote saving through home ownership and limit the repackaging of consumer debt into mortgages guaranteed by taxpayers.
Withdraw government insurance backing on lines of credit secured by homes, such as home equity lines of credit, or HELOCs. This will ensure that risks associated with consumer debt products used to borrow funds unrelated to house purchases are managed by the financial institutions and not borne by taxpayers.
http://www.fin.gc.ca/n11/11-003-eng.asp
WHAT DOES THIS MEAN FOR YOUR BUYERS?
30 year vs. 35 year amortization
$300,000 purchase price $300,000 purchase price
$15,000 (5% down payment) $15,000 (5% down payment)
3.75% interest rate/5yr term 3.75% interest rate/5yr term
30 yr amortization 35 yr amortization
$1620.66/month $1519.59/month
$60,774.92 income needed $56,984.80 income needed
This example is based on today’s rates and is subject to change.
Refinance is changing from 90% to 85% as mentioned in the above article.
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TAMMY CARTIER LendingMax Mortgage Broker
Tel: 250-448-7448 | Fax: 250-448-7449
#212, 1980 Cooper Rd,
Kelowna BC V1Y 8K5
A great Motgage Broker! If you want help with your financing call TAMMY at 250-448-7448 