Although the rules for mortgages in Canada changed effective July 9th, I wanted to highlight some of the changes for you in case you missed them when they were first introduced.
What’s changed?
Under the rules that went into effect, borrowers are allowed to use up to 80% of their property’s value as collateral for home-equity loans, down from 85%. This means that Canadians can’t borrow as much as before from their home’ s equity.
In addition, the maximum amortization period dropped to 25 years from 30 years for government insured mortgages. Note that the 30 year amortization is still available for mortgages as long as the buyers make at least a 20% down payment. It is only the government insured mortgages that are affected.