The Government of Canada announced today that it is changing some of the rules for obtaining a mortgage.
Personally I find it very interesting as last week there were a few rumors and all of a sudden its reality.
Changes include:
- Maximun amortizations will be reduced from 35 years to 30 years.
- Maximum loan to value for refinances will be reduced from 90% to 85% – March 18, 2011
- The Government will no longer offer insurance for lines of credit – April 18, 2011.
In my opinion the changes will not have a dramatic effect on Real Estate and will only affect mortgages with a loan to value of greater than 80%.
What this Means for an average mortgage.
| 35 Year Amortization | 30 Year amortization | |
| Mortgage | $350,000 | $350,000 |
| Interest Rate | 4.3% | 4.3% |
| Monthly Payment | $1605.19 | $1724.24 |
* For a mortgage of $350,000 at 4.3% it will increase the monthly payment by $119.05 and will have your mortgage paid off 5 years sooner.
Brought to you by Gord Piper and Associates. For more information please feel free to contact us.
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Tags: Adjustable-rate mortgage, Amortization, Banking, Finance, Mortgage, Real estate