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February 17, 2010

As many of you are aware already, a news conference was  held yesterday morning in Ottawa by the Federal Finance Minister Jim Flaherty.  He announced three major changes to mortgage insurance rules which will affect all government backed insurance programs.

1. All borrowers will need to qualify at a five year rate regardless of whether they are choosing a shorter term or a variable rate mortgage.  It is unclear whether this rate will be the posted or discounted rate as we await clarity for this question.
2. Refinances will be limited to 90% LTV versus the current 95% limit.
3. Non-owner occupied properties  will require a down payment of 20%.

The good news is that rumours of a required 10% down for new home buyers on their principal residence and a reduction of amortization periods to 30 years are not currently being introduced.

These rule changes are scheduled to take place as of April 19, 2010.

Click HERE for the detailed press release.

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