New mortgage rules - a review of FAQ

Real Estate Sales Representative with Homelife Realty One Ltd. Brokerage

The recent mortgage changes are still causing confusion with potential buyers/borrowers.  The following are the most common questions provided by my mortgage consultant:

·         Has the minimum equity requirement changed?  It depends:

-          No change for purchases:  minimum equity remains at 5%

-          Yes when refinancing: client requires 20% equity in property.

·         Is the maximum amortization 25 years?  It depends:

-          High ratio mortgages (less than 20% equity):  maximum amortization is 25 years;

-          For conventional mortgages (minimum  20% equity):  maximum amortization of 35 years is still available with a few prime lenders.

·         Can I have a high ratio mortgage if the property purchase price is over $1 million?

-          NO – for purchases over $1 million, the new rules state the minimum down payment must be 20%.

·         I have a preapproval – does that mean I’m still ok under the old rules?

-          NO – preapprovals based on the old guidelines are no longer valid.  When arranging a final approval, it will be approved based on new guidelines.

If you have any concerns about how the changes impact your buyers, I can connect you to a qualified mortgage professional. 

Although mortgage rates remain very low, it’s  important to work with them on a long term strategy.


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Contact me to find out more about Toronto Modern Real Estate

Anne Lok Sales Representative, Homelife/Realty One Ltd. Brokerage
Tel: 416-922-5533 | Mobile: 416-799-9632



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