Homeowners looking to take out a home equity line of credit will find their borrowing power slashed as the National Bank enforced a 65 per cent LTV cap which takes effect today.
The CMHC had added their predictions to the cooling housing market pile – and they’re fortunately less extreme than past calls of a 10 per cent drop. While they’re forecasting a slowdown in pricing, new construction and existing home sale figures, Canada’s housing market is still sitting pretty compared to the U.S., where 4 million homeowners are now underwater on their mortgages.
This week we saw the Bank of Canada stick to their guns, announcing they would hold their rate of 1 per cent in their July announcement. In new mortgage rule news, lenders are responding to the guidelines in different ways, with some banks applying limitations to their conventional mortgage products as well – and credit unions may provide options for those looking to skirt the new HELOC and cash-back mortgage rules.
The days of 30-year high ratio mortgages are over as the mortgage rule changes announced June 21st by the Department of Finance go live today. While the changes have been put in place to cool an overly aggressive housing market and curtail Canadians’ debt to income ratio levels, it’s the short term implications that have everyone from first time home buyers to brokers wondering – what’s it going to cost?
January 2011 – Changes to the mortgage regulations in Canada. Your questions answered.