New Mortgage Rules

If you planning on buying a home or refinancing an existing home in Calgary, the new mortgage rules may affect you. Starting July 9, 2012 the new rules will decrease the maximum amortization for a government-insured mortgage in Canada from 30 years to 25 years. This affects home buyers who have a down payment of less than 20 per cent. The federal government is hoping that the new rules will prevent homeowners from stretching themselves too thin.

The federal government has also lowered mortgage refinancing, reducing the maximum mortgage amount to 80% of the appraised value of the home, from 85%.

One other change is that properties over 1 million dollars can no longer be mortgage insured. Mortgage insurance is required by most lenders when someone is putting less than a 20% down payment. The two major mortgage insurers are CMHC and Genworth. These insurers charge a premium to borrowers to cover the insurance expense to the lenders. If the borrower defaults on the mortgage, the mortgage insurer pays the lender the money back.

To find out more information about these or other mortgage rules, contact Marnie Campbell, Calgary Realtor®.  Marnie will put you in touch with her trusted mortgage specialists.


Posted by Marnie Campbell on


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