Finance Ministry Jim Flaherty announced during a news conference on June 21st that the Government of Canada will be tightening the guidelines for insured (less than 20% down) mortgages in Canada for the fourth time in four years. These Changes are listed as follows:
· The maximum amortization will be lowered from 30 to 25 years.
· Loan-to-Value (LTV) on refinances will be reduced to a maximum 80% from the current max of 85%
· The Gross Debt Service (GDS) ratio will now have a maximum of 39% whereby before there was no maximum on GDS for those with a credit score of 680 and above
· CMHC (the government backed insurer) will no longer insure properties with a value greater than $1 million
Secured lines of credit (HELOC) max 65% LTV (unsure of when deadline will be for this)
Please note: There are no changed to the minimum 5% down payment required to buy a home.
This is for CMHC. We have not heard from Genworth or Canadian Guaranty Trust on if / when they will be making changes to their guidelines.