Kevin@Flaherty.ca Home Selling System Blog

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The government this morning announced three changes to the manner in which mortgages will be underwritten in Canada. These changes are

1)      All borrowers/home buyers to be qualified on the 5 year fixed rate regardless of which product they are opting for
2)      Maximum loan to value on a refinance is reduced to 90% from 95%
3)      All “speculative” real estate properties (I assume they are referring to rental properties) now require a 20% down payment

In short, these changes should not impact the rea estate market very much. Banks are currently using the 3 year fixed rate (3.59%)  to qualify variable clients so moving that to the 5 year fixed (3.89%)  is not a big deal. Second the refinance revision is of no interest to Realtors or the resale real estate market. Third but certainly not least, 20% down payment now required for “speculative” properties. The truth is cmhc’s premiums on rental properties were extremely unattractive and more times than not an investor would voluntarily put 20% down anyways.

Kevin Flaherty
iPro Realty Ltd. Brokerage
Direct: 1-877-352-4378
Web: http://Flaherty.ca