Finance Minister Jim Flaherty has just released some info on new rules for CMHC insured mortgages, which will be implemented as of March 18th. A CMHC insured mortgage occurs when less than 20% is put down on a purchase of a property.
For home buyers with a CMHC insured mortgage, the new rules will effect mortgage amortization. Amortization will be changed from 35 years to 30 years. On average this change will increase monthly payments by around $40 for every $100K borrowed. Down payments for purchases can still be 5%.
In terms of refinancing, the max mortgage advance will be 85% of the appraised value. This loan to value number used to be 90%.
Good news is that these new mortgage rules will help to keep interest rates low. The Bank of Canada has announced no prime rate change, leaving variable rate mortgages and credit lines as is. Flaherty hopes these new rules will help to keep Canadians spending in check.
We have about 2 months before the new rules come into play (March 18th). If you are looking to purchase a Toronto condo, make sure to visit the bank or your mortgage broker soon to arrange financing. Contact the Condo Chicks below in you are looking to purchase or sell a Toronto Condo.
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