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The Bank of Canada announced new changes to come to Canadian mortgage guidelines this morning. This is the fourth tightening of guidelines in the past 4 years. They have clearly stated that the intention of their continual clamping down of qualifying criteria is an attempt to cool down the housing market and reduce household debt in Canada. I was pleased to hear that the 5% down payment rule would remain; however it is yet to be determined how these new rules will affect home owners. They will take effect on July 9th and I believe that they have implemented such a short time frame in order to eliminate the surge of people rushing into home purchases that was experienced with the last announcement of changes.

Here are the new changes:
• Maximum amortizations will be reduced from 30 years to 25 years
• Maximum refinances will be reduced from 85% to 80%
• Maximum GDS and TDS are set at 39% and 44%
• Properties purchased at over $1 million will no longer be eligible for mortgage insurance


Here are a few of this morning’s articles on the announcement:
Globe and Mail article click here
MortgageBrokerNews.ca click here
CanadianMortgageTrends.com click here
CBC News click here
To review the government press release and backgrounders click here

Today, OSFI also released its final Underwriting Guidelines as a result of the B20 Discussion Paper.
To view the final Guidelines click here
To view OSFI's Interim Update Letter click here

It is very important that anyone with a pre-approval contacts their mortgage professional immediately to see how the changes will be alter their applications.

Please feel free to contact me with any questions.

http://www.christinebuemann.com/

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Location: 1596 3rd Ave, Prince George, BC V2L 3G4, Canada

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