Special offer

New Mortgage Changes for Ontario Effective March 18th 2011

By
Real Estate Agent with Royal LePage Niagara Real Estate

Mortgage Changes for Ontario

Is your mortgage coming up for renewal or are you looking to buy a new home in the immediate future or refinance your existing home?  These new mortgage rules will apply and decrease the amortization and amounts that you could have borrowed before March 18th.  Its a good idea to talk to a Mortgage Specialist and/or your bank - I can put you in touch with one if you need to, or give me, Sally Dollar, a call and we will see what we can do. 

The Honourable Jim Flaherty, Minister of Finance, and the Honourable Christian Paradis, Minister of Natural Resources, announced prudent adjustments to the rules for government-backed insured mortgages to support the long-term stability of Canada's housing market and support hard-working Canadian families saving through home ownership.

The new measures:

 · Reduce the maximum amortization period to 30 years from 35 years for new government-backed insured mortgages with loan-to-value ratios of more than 80 per cent. This will significantly reduce the total interest payments Canadian families make on their mortgages, allow Canadian families to build up equity in their homes more quickly, and help Canadians pay off their mortgages before they retire.

 · Lower the maximum amount Canadians can borrow in refinancing their mortgages to 85 per cent from 90 per cent of the value of their homes. This will promote saving through home ownership and limit the repackaging of consumer debt into mortgages guaranteed by taxpayers.

 · Withdraw government insurance backing on lines of credit secured by homes, such as home equity lines of credit, or HELOCs. This will ensure that risks associated with consumer debt products used to borrow funds unrelated to house purchases are managed by the financial institutions and not borne by taxpayers.

 Our Government's ongoing monitoring and sound underlying supervisory regime, along with the traditionally cautious approach taken by Canadian financial institutions to mortgage lending, have allowed Canada to maintain strong and secure housing and mortgage markets.

 The adjustments to the mortgage insurance guarantee framework will come into force on March 18, 2011. The withdrawal of government insurance backing on lines of credit secured by homes will come into force on April 18.

Comments (3)

Larry Costa
Century 21 Classic Gold, Carver MA - Carver, MA
Realtor, MA Real Estate

I still think banks should be required to refinance provided that the borrower is doing so strictly for the reason of reduced rates and lower payments. Too many banks refuse requests on loans they already hold, because there is not enough equity or appraisal is no longer there. REALLY? they already have the loan and the house as collaterall. Why keep their client in a high risk situation and risk foreclosure?

Jan 18, 2011 12:55 AM
Sally Dollar
Royal LePage Niagara Real Estate - Saint Catharines, ON

So far we have been lucky with our banks in Canada that their guidelines have been tough enough that we have not had as many short sales as the US have/had.  I agree that if they had already loaned to the borrower and its a refinance, that the banks should give more grace if the client is in good standing.  Thanks Larry.

Feb 03, 2011 01:20 AM
Sally Dollar
Royal LePage Niagara Real Estate - Saint Catharines, ON

So far we have been lucky with our banks in Canada that their guidelines have been tough enough that we have not had as many short sales as the US have/had.  I agree that if they had already loaned to the borrower and its a refinance, that the banks should give more grace if the client is in good standing.  Thanks Larry.

Feb 03, 2011 01:20 AM