An amendment to the Bank Act by the Government of Canada means lower mortgage financing costs for some owners of residential property in Canada.
Owners and purchasers of Canadian residential property will not be required to purchase high ratio mortgage insurance if their mortgage does not exceed 80% of the value of their property.
(Bank Act definitions: "residential property" means real property consisting of buildings that are used, or are to be used, to the extent of at least one half of the floor space thereof, as one or more private dwellings;)
BILL C-37 / PROJET DE LOI C-37
An Act to amend the law governing financial institutions and to provide for related and consequential matters
Loi modifiant la législation régissant les institutions financières et comportant des mesures connexes et corrélatives
PART 1 AMENDMENTS TO THE BANK ACT / PARTIE 1 MODIFICATION DE LA LOI SUR LES BANQUES
Restriction on residential mortgages
27. Subsection 418(1) of the Act is replaced by the following:
418. (1) A bank shall not make a loan in Canada on the security of residential property in Canada for the purpose of purchasing, renovating or improving that property, or refinance such a loan, if the amount of the loan, together with the amount then outstanding of any mortgage having an equal or prior claim against the property, would exceed 80 per cent of the value of the property at the time of the loan.
Restrictions : hypothèques
359. Le paragraphe 418(1) de la même loi est remplacé par ce qui suit :
418. (1) Il est interdit à la société de faire garantir par un immeuble résidentiel situé au Canada un prêt consenti au Canada pour l’achat, la rénovation ou l’amélioration de cet immeuble, ou de renouveler un tel prêt, si la somme de celui-ci et du solde impayé de toute hypothèque de rang égal ou supérieur excède quatre-vingts pour cent de la valeur de l’immeuble au moment du prêt.
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