Thursday, October 28, 2021 02:15

New Mortgage Rules Take Effect Today

The new mortgage rules for Insured mortgages take effect today. To recap, the changes that are taking place are for mortgages which require mortgage default insurance.  Default insurance is typically only required on mortgages with less than a 20% down payment.

The 2 main changes to take note of are:

The maximum amortization has decreased to 30 years from 35 years.

The maximum Loan-To-Value ratio for refinances has been decreased from 90% to 85%

It is important to note that for non insured mortgages amortizations of 35 and even 40 years are still available.

This week some banks, notably the nations largest mortgage lender RBC announced that they would be implementing the 30 year maximum amortization rule for ALL their mortgages.

On the other hand banks like ING have announced that they are not changed their amortization rules for conventional mortgages and are still offering 35 year amortizations.

Again, this shows why shopping around and knowing your options are important. If you are a RBC client and a 35 year amortization make sense for your situation then opt for a lender that is still offering longer amortizations.

If you have any questions about these changes or qualifying for a mortgage please get in touch with us.

John Shearer