The Bank of Canada recently announced three changes to Mortgage Lending Rules in an attempt to put Canadians on a "debt diet".  The changes include reducing the maximum amortization period to 30 years from the current 35 on high ratio mortgages, reducing the amount that homeowners can refinance their existing homes to to 85% from the current 90%, and eliminating their insurance on High Ratio Lines of Credit.

The first two changes take place on March 18, 2011, and the last on April 18, 2011.
 
All Offers to Purchase dated on or before March 18, 2011 are still eligible for a 35 year amortization (even new construction deals closing on extended time frames).
 
Clients renewing their mortgage from a 40 year amortization will be able to renew their mortgage for a 35 year amortization regardless of the maturity date. 
 
If clients started with a 40 year amortization, and they choose to refinance before March 18th, they can still opt for a 35 year amortization, after March 18th, they will be forced to take a maximum amortization of 30 years.
 
Clients interested in listing their homes in 2011 can capitalize on this news by placing their homes on the market, as more clients will be able to qualify in higher price ranges while the extended amortization periods are still available.  Clients looking to purchase and maximize their spending power will want to take advantage of the 35 year amortization period before they are reduced.

Text courtesy of Brent Beattie, Mortgage Specialist O: 905-897-9555  | C: 905-464-2215