The following rules will apply to purchasers and home owners requiring hi-ratio financing [less than 20% down payment / equity].
The Federal Government announced this morning four new clampdowns on insured mortgages effective Monday, July 9th, 2012.
These changes include:
- Reducing the maximum amortization period to 25 years from 30 years
- Reducing the maximum amount of equity homeowners can take out of their homes when refinancing to 80% from the current 85%
- Limiting the availability of government-backed mortgages to homes with a purchase price of less than $1 million
- Fixing the maximum gross debt service ratio at 39% and the maximum total debt service ratio at 44%