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Did you know…
The new mortgage rules that came into effect on July 9, 2012 reduced the maximum amortization period for a mortgage from 30 years to 25 years for high ratio mortgages? This means that the maximum length of time it takes to pay down a mortgage for Canadians is now 25 years if you have less than 20% equity in your home (i.e. if you are paying CMHC insurance).
The maximum amount for mortgage refinancing was also reduced. Before July 9 Canadians could refinance their home for up to 85% of the value of their homes. This has been lowered down to 80%.
Furthermore, no mortgage insurance will be provided for properties worth over $1 million. Buyers who provide a mortgage down payment less than 20% of the purchase price will still be required to pay for CMHC mortgage insurance.
What does this mean for Canadians?
The Canadian government is trying to protect the Canadian financial market and maintain its stability. By ensuring that Canadians keep more equity in their homes and pay off their mortgages faster the government hopes to lower the risk for taxpayers and lower household debt.
What does this mean for your mortgage application?
The new mortgage rules make obtaining financing a little bit tougher for Canadians. This makes using a mortgage broker in Canada more valuable than ever. If you are looking for a mortgage loan then speak with a Loans Canada customer care representative. We encourage you to let us leverage our influence and expertise in your favor. We know we can get you the loan you want with a rate and term better than your bank can offer.