New Mortgage Rules

New mortgage rules take effect April 19

Recent changes to Canada's mortgage rules announced by the Minister of Finance, the Honourable Jim Flaherty, will take effect April 19, 2010. The changes have three different components:

1. Requiring 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.

2. Lowering 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 homeownership is a more effective way to save.

3. Requiring a minimum down payment of 20 per cent for government-backed mortgage insurance on non-owner-occupied properties purchased for speculation.