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Archive for August, 2012

Home buyers and sellers should be aware that there has been a further tightening of Canadian mortgage regulations that came into effective July 9th.   In the June 21st announcement from the federal government, Finance Minister Jim Flaherty stated that the new regulations were introduced “to keep the housing market strong, and help to ensure households do not become overextended.”

Changes include the maximum amortization period being reduced to 25 years from the previous 30 years. Also, the maximum amount of equity homeowners can take out of their homes in a refinancing is being reduced to 80% from 85%. These new mortgage regulations echo earlier reductions of amortization period and lowered refinancing maximums that came into effect last year.   

Click here for further details on Canada’s new mortgage regulations. 

Meanwhile, the Canadian real estate market remains balanced, and Canada continues to enjoy near-historic low interest rates.  With affordable financing readily available, the dream of homeownership remains in reach for a large number of Canadians.  While the reduction in maximum amortization period may affect some buyers, there are a great many who will not be impacted by the changes.  Those buyers who may have planned to amortize their mortgage over a 30-year period now have several options, including saving for a larger down payment, choosing a slightly lower-priced home in their target area, or consider trading location for commute.  There are a variety of options, and buyers should work with their local Coldwell Banker© real estate professional to find the solution that’s right for them.

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