This morning Canada’s Finance Minister Jim flaherty tightened the rules and guidelines for Canadians when qualifying for a mortgage.
Under the new rules, starting April 19th, 2010 buyers will have to meet qualification standards for a 5 year term regardless of whether they take a shorter term or variable rate with a lower interest rate.
Home owners will now only be able to access their equity to a maximum of 90% of the value of their home for equity take out mortgages, rather than the 95% previously allowed. These sort of mortgage clients normally used funds for investments, debt consolidation and renovation uses.
Now, if you’re a future property investor you need to take note of this change. You are NOW required to put a minimum of 20% down for non owner-occupied purchases. This change, in my opinion has the ability to have the biggest impact in our market. When you consider where interest rates are (historical low) more and more clients are trying to get into the housing / revenue market.. the higher down payment will likely take a bite out of that market.
for the full press release please click on this link – full press realease
Thanks for reading, I’m looking forward to any and all comments.