Government Tightens Mortgage Lending Rules
Good Afternoon Everyone,
This is just a quick email to pass along some important changes that the Government of Canada announced today regarding mortgage rules.
Here is a brief summary of the changes:
- Clients who want a variable rate mortgage now have to qualify for the mortgage based on the current 5 year fixed rate to ensure they can afford higher payments in case rates go up.
- Clients who are looking to refinance their homes can only refinance up to 90% of the value of their home with CMHC insurance. On purchases, clients are still allowed to borrow up to 95% of the value of the home.
- For rental properties, clients can no longer get a CMHC insured mortgage. Clients must now have a down payment of 20% on all rental property purchases.
These changes come into effect on April 19th. Therefore borrowers have 2 months to qualify for these mortgages without the new rules.
Please call our office if you have any questions regarding these changes.
We strongly encourage clients who need any financing under the current rules to call us soon to take advantage of the current programs before they change.