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How will the shortened amortization affect your new mortgage?

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As of today, the new mortgage rules for insured mortgages are officially in effect. The major change that most people have been discussing is the shortening in maximum amortization from 30 years to 25 years. How will this affect people who were pre-approved under the old rules, but now will have to abide by the new ones? Here are some approximate numbers for the following mortgage amounts over a 5 year term at a fixed rate of 3.19%:

$200,000
-payment increase of $100 a month
-total interest savings of $510 over a 5 year term
-total reduction of principle by $6,790 over the term

$250,000
-payment increase of $130 a month
-total interest savings of $640 over the term
-total reduction of principle by $8,480 over the term

$300,000
-payment increase of $150 a month
-total interest savings of $770 over the term
-total reduction of principle by $10,180 over the term

Please also keep in mind that an increase in monthly payment also means that you will qualify for slightly less for your maximum mortgage amount.

If you were pre-approved prior to the changes, it is very important that you speak a Mortgage Professional about how the changes will affect you. 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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