Kyle Hislop

  We were waiting for a change to the lending rules since Finance Minister Jim Flaherty's comments a few weeks ago and today those changes have been put forward.  As a REALTOR® any changes to the lending rules is a big deal because it usually affects our business directly.  Over the past weeks we have been speculating a variety of changes that could be made - the worst would have been increasing the minimum down payment from 5% to 10%.  I'm happy to report that was NOT one of the changes made.  In my opinion the 3 changes that were made are all healthy changes to continue Canada on the path as the strongest lending country in the world.
 
 Here are the three changes:

1.  Amortization will be cut back to 30 years from 35 years.  This one was pretty obvious.  The amortization period maxed out at 40 years for a few years but the government believes Canadians will do better to pay off their mortgage sooner. 

2.  The maximum value of a home that can be re-finance will drop from 90% to 85%.  This will help insure Canadians don't use the equity in their home like a personal ATM.

3.  Government insurance will no longer be available for financial institutions wishing to insure home equity lines of credit.  This will as the government has stated, "ensure that risks associated with consumer debt products used to borrow funds unrelated to house purchases are managed by the financial institutions and not borne by taxpayers". Government of Canada

 So, what do you think?  Will this change your plans of buying a home?  Type of home you would buy?  I respond to all comments, please use the comment area below.

Thanks,

Kyle Hislop
RE/MAX