It’s just been announced this morning by Jim Flaherty, the Finance Minister, that several new mortgage regulations have been introduced to keep homeowners financially responsible. Here is a summary of the changes you need to know:
- Mortgage Amortization
Amortization periods have been cut from 35 years to 30 years. - Refinancing Amounts
The maximum total amount a homeowner can refinance their mortgage has been cut from 90% to 85%. - Credit Lines
Home equity lines of credit and any other lines of credit secured on homes will no longer have government insurance backing.
These changes are meant to help homeowners by encouraging responsible lending and pushing people to increase equity rather than debt in their homes. The new rules will be taking effect on March the 18th of this year.
It is expected that these rules will impact the monthly carrying cost of a mortgage, increasing it on average of about $100 for a typical homeowner in Canada.
