This morning, the Federal Finance Minister announced further changes to Canada’s mortgage insurance rules. Four measures were announced:
1. Amortizations reduced to 25 years 2. Refinancing limited to 80% 3. Properties purchased at over $1 million no longer eligible for mortgage insurance 4. GDS and TDS set at 39% and 44%
CAAMP believes that Canadians understand the importance of paying down their mortgages.
These changes, together with new OSFI underwriting guidelines – also to be announced today – may precipitate the housing market downturn the government so
desperately wants to avoid. The changes take effect July 9, 2012.
Lobbying efforts were successful in ensuring the 5% down payment rule remains intact; however, the government may have overreached with this latest round of changes.