The Government of Canada has announced more changes to government-backed insured mortgages in the hopes of limiting the amount of household debt Canadians have and to cool the housing market further.
Four changes were announced and will come into effect on July 9, 2012.
- Reduce the maximum amortization period to 25 years from 30 years.
- Lower the maximum amount Canadians can borrow when refinancing to 80 per cent from 85 per cent of the value of their homes.
- Fix the maximum gross debt service ratio at 39 per cent and the maximum total debt service ratio at 44 per cent.
- Limit the availability of government-backed insured mortgages to homes with a purchase price of less than $1 million. All homes over $1 million will require a minimum of 20% down payment.