New rules for government backed mortgages were announced yesterday by the Minister of Finance, Jim Flaherty. I do not think that this will be a significant impact to us in Winnipeg and is probably a good measure for maintaining a long-term stability of our housing market. The three new rules come into effect on April 19th, 2010 so be prepared! The new rules are:
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Require that all borrowers meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term. This initiative will help Canadians prepare for higher interest rates in the future.
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Lower the maximum amount Canadians can withdraw in refinancing their mortgages to 90 per cent from 95 per cent of the value of their homes. This will help ensure home ownership is a more effective way to save.
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Require a minimum down payment of 20 per cent for government-backed mortgage insurance on non-owner-occupied properties purchased for speculation.
What are your thoughts?