I apologize for the second email this week, but no sooner had I delivered the email yesterday, the mortgage industry was hit with a "double whammy" with new restrictions to the mortgage rules in Canada.  

This will affect many people planning to buy or refinance their mortgage. Please FORWARD this information to your co-workers, friends and colleagues.  

First, the Department of Finance delivered changes that will take effect July 9th, then followed later in the day by the Office of the Superintendent of Financial Institutions (OSFI) with more restrictions to be in effect by the end of this fiscal year.  

Department of Finance

Finance Minister Jim Flaherty outlined new rules effecting CMHC, Genworth and Canadian Guaranty; these are the high ratio mortgage insurers in Canada.  Therefore, these changes only effect those purchasers who plan on putting less than 20% down.  Those putting 20% or more down are not affected by these changes.

1. Amortization Period is REDUCED to 25 years from 30 years
2. Refinancing is REDUCED from 85% LTV to 80% (no change to purchases)
3. Maximum GDS is reduced to 39% from 44%
4. Maximum Purchase Price for government backed mortgage insurance is $1 Million.  Homes above $1 Million must have 20% down payment

Office of the Superintendent of Financial Institutions (OSFI)

• HELOCS are now limited to a maximum of 65% of a home's value - 80% was previously permitted maximum.
• Qualifying rates for "Conventional" mortgages - will now need to be at the Benchmark Qualifying Rate if the term is less than 5 years. This aligns with insured mortgage requirements released in April 2010.
• Elimination of Stated Income programs - Evidence of "reasonable" cash flow to debt service mortgage requests will be required under new rules
• Elimination of Cash Back mortgages (100% financing) - Clients will need a minimum 5% down from own resources. Gifted funds will continue to be permitted.

For more information, visit my website. I've uploaded a very extensive 'Frequently Asked Questions' -   Gov't Changes - FAQ's 

These changes will effect the real estate market in Canada. It now will take about $5000 more income to qualify for the same $300K mortgage after July 9th.  

There is no doubt you will have questions and I will do my best to keep you up to date as the lenders adopt the new policies.  

If you want to beat the deadline, get an application under way today. Click on the button below to start the process.  

p.s - for a comprehensive review on how the changes will affect your plans moving forward, don't hesitate to contact me directly to schedule a mortgage review.  

Term         Best Rate

1 year Fixed      2.74%

Is a 10 Year Mortgage a Good Option

Is a 10 Year Mortgage a Good Option?

I recently posted a video about 10 year mortgages. With the potential of future increases in fixed rates, taking a 10 year can be a good option. If you feel that 5 years from now, a 5 year fixed could be higher than 4.6%, then a 10 year is a better choice in the long run.  

Ask me how you can combine a great long term guaranteed rate with a strategy to avoid future payment shock. I would be happy to have the privilege of managing your mortgage!