From the blog...

New Mortgage Rules

Posted on: June 28th, 2012 by Chris Scott

For the fourth time in as many years, the finance minister moved to tighten the mortgage and lending landscape. The most significant change is the reduction to the amortization period, bringing it to a maximum of 25 years,  the level it had stood historically before rising to as high as 40 years during the heady pre recession days of 2006 and then 30 years until this announcement.

On a $350,000 mortgage with three-per-cent interest, this change will increase monthly payments by $184 over what they would have been with a 30-year amortization.  Over the lifetime of the mortgage, however, the homeowner will save $33,052 in interest payments because the home will be paid off five years sooner.

There is also a new limit on how much homeowners can borrow on the value of their homes: now 80 per cent, from 85 per cent.

The changes go into effect July 9.

If you have any questions, give me a shout!  I have access to some knowledgeable folks in the mortgage business if you stump me with a question I can’t answer.


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