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Government Changes to Mortgage Financing
On January 17, 2011 the Government of Canada announced new guidelines for mortgage financing. Most lenders will meet these requirements by making the following changes:
- Maximum amortization for High Ratio (less than 20% down payment) and Conventional (more than 20% down payment) mortgages reduced from 35 to 30 years
- Maximum Loan-to-Value ratio for refinance transactions reduced from 90% to 85%
For Purchase Transactions:
Effective immediately, pre-approvals should only offer a maximum of 30 year amortization
For full applications approved prior to March 18, 2011, existing amortization rules up to 35 years apply. For full applications approved on or after March 18, 2011, new amortization rules of up to 30 years
apply.
For Refinance Transactions:
For all refinance applications approved prior to March 18, Loan-To-Value up to 90% applies. For all refinance applications approved on or after March 18, Loan-To-Value is not to exceed 85%.
For purchase or refinance deals with a closing date prior to March 18, 2011 existing amortization rules (up to 35 years) and refinance (LTV up to 90%) applies.
Please contact our office for information or any details.
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