Flaherty Changes Rules for CMHC-Backed Mortgages
Last week, in an attempt to cool the housing market, Finance Minister Jim Flaherty finally ended the speculation on the changes to CMHC-backed mortgages.
The new rules break down this way:
- Borrowers will need to qualify for a five-year fixed-rate mortgage (instead of the current three-year criteria), even if the borrower is looking for a mortgage with lower monthly payments.
- Those looking to refinance their mortgage can only borrow 90% of the assessed value of their home (down from 95%).
- Real estate investors and speculators will now have to put down 20% (up from 5%).
The new rules go into effect on April 19, 2010, but it’s likely that lenders will start implementing these rules immediately.
Ready to jump into the real estate market and confused about what you can afford under the new rules? Contact a mortgage broker to walk you through the process.
