These are the changes that are to take effect on July 9, 2012. If you have any questions please email us!
New Mortgage Rules to take effect on July 9, 2012
1) The maximum Amortization period will be reduced to 25 years, down from 30 years
2) The maximum Refinance amount will be 80% of the appraised value of your home (reduced from 85%)
3) CMHC will no longer insure mortgages on homes with a purchase price of more than $1 million
4) The maximum Gross Debt Servicing Ratio will be reduced to 39% and the Total Debt Servicing Ratio will be set at 44% of a Borrowers income.
Please note: the changes in 1, 3 and 4) affect the high ratio/insured mortgage cases only. 2) CMHC will no longer insure refinances so now must be conventional (20% equity left in home) when equity is taken out.
With conventional financing, lenders will make concessions on lending giving those with 20% or higher down payment more flexibility in amortization, lending amount ($1 million +) and debt service ratios.