The Honourable Jim Flaherty, Minister of Finance, announced four measures for new government-backed insured mortgages with loan-to-value ratios of more than 80 per cent:
1. Reduce the maximum amortization period to 25 years from 30 years.
2. Lower the maximum amount Canadians can borrow when refinancing to 80 per cent from 85 per cent of the value of their homes.
3. Fix the maximum gross debt service ratio at 39 per cent and the maximum total debt service ratio at 44 per cent.
4. Limit the availability of government-backed insured mortgages to homes with a purchase price of less than $1 million.
The new rules will take effect on July 9, 2012.
For more detailed information, please visit www.fin.gc.ca