Important New Changes to Canadian Mortgage Policies, Rules, and Laws

Mortgage and Lending with Arnason Mortgages

The Government of Canada announces 4 significant changes that will affect mortgage qualification for all Canadians buying a home or refinancing a mortgage.

Canadian mortgage changes announced by Finance Minister Jim Flaherty on June 21, 2012:

1. Amortizations reduced to 25 years from 30 years
2. Refinancing limited to 80%
3. Properties purchased at over $1 million are no longer eligible for mortgage insurance
4. GDS and TDS set at 39% and 44%

These new rules are to take effect on July 9th, 2012. Any application submitted between June 21st, 2012 till Jul 9th, 2012 will be subject to the current guidelines but the mortgage must fund before December 31st 2012. If you would like to submit an application prior to July 9th please call us at 403-265-5363 or email or visit us online at This email address is being protected from spambots. You need JavaScript enabled to view it.

The first in the list is the reduction of the maximum amortization (the number of years you can spread your mortgage over) for insured mortgages. The current maximum amortization is 30 years, the change is only effecting insured mortgages. The drop of the maximum amortization will reduce the maximum mortgage amount you can qualify for. That means the new 25 year amortization rule may affect your application when buying a new home depending on your income and other factors.

The second change is the reduction of the maximum amount you can refinance your mortgage. Currently you can refinance your mortgage to 85% of the value of the property, as of July 9th, 2012 the maximum amount you can refinance your property to is 80% of the value. The biggest question people are asking is what happens if I am currently mortgaged to 90% of the value? You should be able to switch your mortgage to another lender assuming you qualify with your income and credit level however you will not be able to increase your mortgage amount or change the length of the amortization. We recommend speaking with a broker as soon as possible to see if you can refinance prior to the July 9th deadline if you have any concerns about this new policy, you can reach us by phone at 403-265-5363 or by email anytime at This email address is being protected from spambots. You need JavaScript enabled to view it. for a complimentary consultation.

The third change, it is very simple, if you are buying a property for more than $1,000,000.00 you must put at least 20% down.

The fourth change, previously the standard GDS* (Gross Debt Service) ratio was 32% and for customers with a credit score above 680 the GDS was not factored in. The TDS** (Total Debt Service) ratio has not changed. This will effect is people with high credit scores and very little debt like credit cards or loans that are looking to buy a home to the absolute limits that are allowed. For people that have credit scores between 600 and 679 this can actually increase the amount they qualify for in certain circumstances.

Please feel free to contact me if you have any questions, as everyone has different income and debt levels I would be happy to have a look at your specific situation and let you know how the new rules effect you. To request a complimentary no-obligation consultation of what your mortgage options will be after July 9th or to get pre-approved before the new changes come into effect please visit us at Calgary Mortgage Brokers and fill out the confidential 30 second quick app or email us anytime at This email address is being protected from spambots. You need JavaScript enabled to view it.

~ Larry Arnason, Mortgage Broker

• *GDS – The percentage of your total income used to service the costs associated with the property (Mortgage payment, Taxes, Condo Fees, Heat)

• **TDS – The percentage the total household income used to service all debts including credit cards, lines of credit, personal loans and everything included in the GDS calculation

Form more information on any of our mortgage services please go to or you can call us at: 1-888-722-5086

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Calgary Mortgage Broker, Larry Arnason - proudly serving Calgary and the surrounding communities, Airdrie, Lethbridge, Red Deer, and northern Alberta.  You can lern more about Larry at

One of Calgary’s leading mortgage brokers since 2003, Larry's success stems from a strong motivation to help individuals and families achieve their dreams and find their perfect home with the best mortgage options and rates. As a Mortgage Broker Larry works for you, not a bank or specific lender – he is able to provide impartial advice on your mortgage and find the best rate with the best terms and options to suit your unique financial needs whether you are buying a new house, renewing your mortgage, or refinancing.

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