Friday, February 19, 2010

Mortgage Adjustments

The Honorable Jim Flaherty, Minister of Finance, today announced a number of measured steps to support the long-term stability of Canada's housing market and continue to encourage home ownership for Canadians.

"Canada's housing market is healthy, stable and supported by our country's solid economic fundamentals," said Minister Flaherty. "However, a key lesson of the global financial crisis is that early policy action can help prevent negative trends from developing."

The Government will therefore adjust the rules for government-backed insured mortgages as follows:

- Require that all borrowers meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term. This initiative will help Canadians prepare for higher interest rates in the future.
- Lower the maximum amount Canadians can withdraw in refinancing their mortgages to 90 per cent from 95 per cent of the value of their homes. This will help ensure home ownership is a more effective way to save.
Require a minimum down payment of 20 per cent for government-backed mortgage insurance on non-owner-occupied properties purchased for speculation.

"There's no clear evidence of a housing bubble, but we're taking proactive, prudent and cautious steps today to help prevent one. Our Government is acting to help prevent Canadian households from getting overextended, and acting to help prevent some lenders from facilitating it," said Minister Flaherty. "If some lenders aren't willing to act themselves, we will act. These measures demonstrate the Government is committed to taking action when necessary to support the long-term stability of a sector that is so vital to our economy and the financial well-being of Canadian families."
In October 2008, the Government adjusted its minimum standards for government-backed, high-ratio mortgages. In February 2010, new measures were announced: qualifying at a 5 year rate; limit the maximum refinancing; and discouraging speculation by increasing minimum downpayment of 20% for non-owner occupied properties.

The above article was provided to me by Kristian Harris of Monster Mortgage.

For the complete article click here

Contact Betty Bartusevicius directly at 416 427 1875 to discuss the purchase of a home or the sale of your existing property.

Betty Bartusevicius, Sales Representative
Re/Max Realty Specialists Inc., Brokerage
Direct: 416.427.1875
PSST: I am never too busy for your referrals of friends, family, and colleagues.

not intended to solicit buyers or sellers under brokerage contract

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