Three new federal rules – changes to current practices – concerning mortgages were announced by Finance Minister, Jim Flaherty, today as a response to the rising consumer debt in Canada.
What are they?
1. The Amortization Period has been reduced to a maximum of 30 years from 35 years for insured mortgages, with more than an 80% loan-to-value-ratio, that are backed by the government.
2. The maximum amount that Canadians can borrow to refinance their mortgages was lowered to 85%, from 90% of the value of their homes.
3. Insurance for lines of credit that are secured by homes, which are backed by the government, will be withdrawn.
