Canada Mortgage Rule Changes 2011

http://www.teammcneil.com - The Federal goverment announced today that it was going to introduce some new rules to help reduces Canadians household debt.

Here are the mortgage rules that Minister Jim Flaherty unveiled:

Maximum Mortgage amoritization will be reduced from 35 years to 30 years
The maximum amount that a borrow can refinance their mortgages wil be lowered from 90% to 85%
The goverment will stop insurance backing lines of credit such as home equity lines of credit
Prime Minister Stephen Harper said Friday his government was "concerned about growth in the level of household debt."

I don't think this will effect home buyers that much . Up until a few years ago, the maximum amoritization was 25 years so it looks like we are just going back to that time. At one point we had 40 year amoritization. However, I think this change will spur on a mini buying surge. Everyone who wants a 35 year amoritization is going to try and beat the deadline of March 18, 2011.

I believe the goverment is taking these measures because they don't want people to default on their loans and cause a mortgage crisis. Consumer debt is on the rise so they are just trying to do what they can now to prevent any future problems.

For in depth information about these changes, see http://www.fin.gc.ca/n11/data/11-003_1-eng.asp

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