Changes to Mortgage Rules

Announced January 17, 2011:

The federal Finance Minister announced several changes to mortgages, effective March 18th, 2011.  There are three key changes the average Canadian should be aware of:

1.  When determining the amount of mortgage you qualify for, you can only amortize over 30 years.  Until recently, this number was 35.  

For example, a house purchase for $200,000.00 less 5% ($10,000.00) and amortized over 35 years would establish a monthly payment of $862.75.  Now, using 30 years, the monthly payment would be $929.03.

Also, the shorter the amortization, the less you will be able to afford.  Using a $200,000.00 purchase at 35 years may only allow you to buy a place for $195, 000.00 when the new rule comes into effect.  Be sure to check if buying after March 18, 2011.

2. When refinancing, especially debt, you can only use 85% of value. 

3. If you want to renew a line of credit against your home, you can only finance 80%.  Formerly, you could receive up to 90%.

Comments

[lederm]

Thanks for you share it!!!!!!!