Federal Finance Minister Jim Flaherty announced this morning that homebuyers looking to qualify for a government-backed mortgage after April 19, 2010 will need to meet three new requirements. The changes revealed this morning include:
• Require that all borrowers meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term.
• Lower the maximum amount Canadians can withdraw in refinancing their mortgages to 90 per cent from 95 per cent of the value of their homes.
• Require a minimum down payment of 20 per cent for government-backed mortgage insurance on non-owner-occupied properties purchased for speculation.
“There’s no clear evidence of a housing bubble, but we’re taking proactive, prudent and cautious steps today to help prevent one. Our Government is acting to help prevent Canadian households from getting overextended, and acting to help prevent some lenders from facilitating it,” Minister Flaherty said in a press release.
*Source: Real Estate Baord of Greater Vancouver February 16, 2010