On June 21st Finance Minister Jim Flaherty unveiled the new Mortgage rules that took effect this past Monday July 9th.
The LTV (Loan to Value) percentage has dropped from 85% to 80% and the maximum amortization has been decreased from 30 years to 25 years. That means in the past 6 years the government has cut amortization (pay back period) almost in half from 40 years (2006) to 35 (2008) to 30 (2011) to this past Monday’s change to 25 years (2012).
The GDS (Gross Debt Service or amount of monthly income spent on mortgage, heating, and property taxes) Ratio has also been changed to 39% and the TDS (Total Debt Service or amount spent on all debt incl. mortgage) is now 44%.
Also government-insured homes now must be $1 million or less and homes priced at $1 million or more must have a 20% down payment paid.
We’ve compiled some of the most informative articles for you to take a look at and if you have any additional questions call your local Mortgage Specialist.
Real Estate Board of Greater Vancouver
Maclean’s Canada
The Globe and Mail
CBC
The National Post
