Mortgage rules announced a few months ago are now the law

 

AS OF NOV. 1:

 

1. Lines of Credit: You can now only borrow to a maximum of 65% loan to value of your property - in the past it was

80%

 

2. Self-Employed: Clients who are self-employed can ONLY go to a maximum loan to value of 65% on conventional

mortgages.

 

3. All Variable Rate Mortgages must use the 5-year Bank of Canada benchmark rate to qualify as well as any fixed or

variable terms less then 5 years insured or conventional must qualify on the 5 year fixed Bank of Canada benchmark

rate. So, if 3 year rate is 2.9% ... that is fine you can get it ... but you need to qualify at the current 5 year rate (currently

5.27%!).

 

IF YOU HAVE LESS THAN 20% down payment, otherwise known as high ratio mortgages, insured through CMHC or

Genworth.

 

1. Amortizations are reduced to 25 years from 30 years.

 

2. Refinancing is REDUCED from 85% Loan-to-value (LTV) to 80% - no change to purchases.

 

3. Properties purchased over $1 million no longer will be eligible for mortgage insurance. Anything over $1 million

dollars, 20% down payment is required.

 

4. GDS and TDS set at 39% and 44%. The reduction in amortization combined with the lowered GDS ratio could

affect a number of people's ability to qualify.

 

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