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Glen Godlonton

Summary of Flaherty's mortgage changes

By Paul Vieira, Financial PostFebruary 16, 2010 7:03 AM

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function resizeImage() { var imgBox = document.getElementById('imageBox'); var photo = document.getElementById('storyphoto'); if (imgBox != null && photo != null) { if(photo.width >= 460) { imgBox.className = 'imagesize460'; } else { if(photo.width >= 300) { imgBox.className = 'imagesize310'; } else { imgBox.className = 'imageboxpadding'; } imgBox.style.width = photo.width + 'px'; } } } function getStoryFontSize() { var storyfontsize = getCookie('storyfontsize'); var storyfontimage = getCookie('storyfontimage'); // use cookied value, if present if (storyfontsize != null) { setClass('story_content',storyfontsize); if (storyfontimage != null) { setClass('fontsizecontainer',storyfontimage); } } else // default it to para14 if no cookie { setClass('story_content','para14'); setClass('fontsizecontainer','size02'); } } function setStoryFontSize(storyfontsize,storyfontimage) { setClass('story_content',storyfontsize); setClass('fontsizecontainer',storyfontimage); setCookie('storyfontsize', storyfontsize, '365', '/', '', ''); setCookie('storyfontimage', storyfontimage, '365', '/', '', ''); } function setCookie( name, value, expires, path, domain, secure ) { // set time var today = new Date(); today.setTime( today.getTime() ); if ( expires ) { expires = expires * 1000 * 60 * 60 * 24; //days } var expires_date = new Date( today.getTime() + (expires) ); document.cookie = name + "=" + escape( value ) + ( ( expires ) ? ";expires=" + expires_date.toGMTString() : "" ) + ( ( path ) ? ";path=" + path : "" ) + ( ( domain ) ? ";domain=" + domain : "" ) + ( ( secure ) ? ";secure" : "" ); } function getCookie( check_name ) { // split this cookie up into name/value pairs var a_all_cookies = document.cookie.split( ';' ); var a_temp_cookie = ''; var cookie_name = ''; var cookie_value = ''; var b_cookie_found = false; // set boolean t/f default f for ( i = 0; i 1 ) { cookie_value = unescape( a_temp_cookie[1].replace(/^\s+|\s+$/g, '') ); } // note that in cases where cookie is initialized but no value, null is returned return cookie_value; break; } a_temp_cookie = null; cookie_name = ''; } if ( !b_cookie_found ) { return null; } } On Tuesday, the Department of Finance announced three changes to the standards governing government-backed mortgages, that come into force April 19. Here are a summary of the changes.

 

QUALIFYING FOR A FIVE-YEAR RATE

The adjustments to the mortgage framework will require mortgage insurers to ensure that new borrowers qualify for a five-year fixed rate mortgage when calculating the gross debt service and total debt service ratios. The measure is intended to protect Canadians by providing them with additional flexibility to support mortgage payments at higher interest rates in the future.

 

LIMIT THE MAXIMUM REFINANCING

Borrowers seeking financial flexibility can currently refinance their mortgage and increase the amount they are borrowing on the security of their home up to a limit of 95% of the value of the property. The adjustment will lower the maximum amount of the mortgage loan in a refinancing of a government-backed high-ratio mortgage loan to 90% of the value of the property, consistent with the principle that home ownership is a tool for savings.

 

DISCOURAGING SPECULATION

This measure will require a minimum down payment of 20% for government-backed mortgage insurance on non-owner-occupied properties purchased for speculation. At present, borrowers may purchase a residential property with a 5% down payment. The change will require a 20% down payment for small non-owner-occupied residential rental properties. Borrowers purchasing owner-occupied residential properties which also include some rental units (such as a duplex) will still be able to access government-backed mortgage insurance with a 5% down payment.

© Copyright (c) National Post

 

Published Friday, February 19, 2010 6:41 PM by Glen Godlonton

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