Mortgae rates to hold but changes to amortization_Diane Plant ReMax Realtron

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Real Estate Agent with Forest Hill Real Estate Inc, Brokerage

The Bank of Canada held it meeting this morning during which it was announced that it is maintaining its target for the overnight rate at 1 percent. This means that Prime rate is to remain unchanged at 3.00%.

It was also announced that the recovery in Canada is proceeding much as anticipated with a period of more modest growth and the beginning of the expected rebalancing of demand. The contribution of government spending is expected to wind down this year, consistent with announced fiscal plans.

The next Bank of Canada Meeting is scheduled for March 1, 2011.

In addition, as most of you have probably heard by now - it was announced yesterday that due to some concern over rising levels of consumer debt, Finance Minister Jim Flaherty is implementing new Federal mortgage lending rules. Namely:

•-          Maximum amortization period on Mortgages with loan to value of more than 80% (CMHC insured) will be reduced to 30 yrs (from 35 yrs)

•-          Maximum loan to value on re-finances will be reduced to 85% (from 90%)

•-          Home Equity Lines of Credit will no longer be available above 80% loan-to value (CMHC insurance is no longer available on Lines of Credit) (which TD Bank along with other major FIs has not been doing for a long time now anyway!)

 

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