Mortgage Changes

The changes to mortgage rules announced by Finance Minister Jim Flaherty caused a ripple effect through real estate - affecting lenders, insurers, buyers and sellers. Insurers and buyers are rethinking their financial strategy, and sellers are wondering what kind of an effect this will have on their ability to move their property. While Saturday, July 7 is the deadline for submitting mortgage applications under the old rules, some lenders are already announcing changes.

How will you be affected?

The 3 major changes are as follows;

1) A reduction in MAX amortization for CMHC insured mortgages from 30 yrs back down to 25 yrs.  This will result in Canadian home buyers paying less in mortgage interest payments over the course of paying off a home. The downfall is that fewer people will qualify for a mortgage as the payments will be higher and more income will be required to qualify for a mortgage.

2) Homes priced over $1 million are no longer eligible for CMHC insurance.

3) MAX refinance has been reduced from 85% (Loan To Value) LTV to 80% LTV.

The idea is that with tighter restrictions, there will be less people obtaining mortgages that place them in financial strain. It won't be as easy to obtain a mortage, but those who qualify should be better able to meet their financial obligation. Efforts such as these reflect the current need to shore up the economy.

Give me a call and we can discuss how this might affect your personal real estate transactions. I'm here to offer everything I can to help you navigate the world of real estate with ease and comfort.

- Mark Kozak with Century 21 Foothills Real Estate in Lethbridge, AB

Nothing endures but change. - Heraclitus 


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