How Will the Upcoming Mortgage Changes Affect You? 

(June 22, 2012 , posted in News)

With the new mortgage rules announced yesterday, you may be wondering how the changes will affect you. There were four main changes announced by the Government.

The first change, one that may affect the most homebuyers, is an amendment to amortization periods. As of July 9, 2012 the maximum amortization period will be reduced from the current 30 years to 25 years. The government hopes that by decreasing the current amortization length, Canadian families will save money in the long run and build more equity in their home even faster. Basically, the lower the amortization, the greater the application to principal versus interest.

The other changes:
  • Canadians can now borrow a maximum of 80% against their home, reduced from the current 85%.
  • Fix the maximum gross debt service ratio at 39 per cent and the maximum total debt service ratio at 44 per cent.
  • Limit the availability of government-backed insured mortgages to homes with a purchase price of less than $1 million.

Here is the Government’s announcement. In the upcoming weeks we will be posting a comprehensive article showing ways YOU can save interest with your mortgage. Check back soon! 

The Goodfellow & Goodfellow Real Estate Team- Providing real estate services to Winnipeg and surrounding areas for over 30 years.