New federal mortgage rules become law
As of Monday April 19 the new federal mortgage rules came into law in an attempt to cool down Canada's hot real estate market. The new rules are:
- All borrowers must meet the standards for a five-year, fixed-rate mortgage, even if they choose a variable mortgage with a lower rate or a shorter term.
- The maximum Canadians can withdraw when refinancing their mortgages drops to 90 per cent of the value of their home, from 95 per cent.
- Buyers must make now a minimum 20 per cent down payment - up from five per cent - to qualify for Canada Mortgage and Housing Corp. insurance for non-owner-occupied properties purchased as an investment.
Vancouver's real estate market has rebounded sharply over the last 12 months with prices just recently surpassing past benchmark‘s set in the spring of 2008. The new rules should slow things down come mid July once people's pre-qualified mortgage periods start running out.
