New Mortgage Rules take Effect Today
Filed Under Contributors, Interest Rates, Mortgages · Tagged: down payment, General, Mortgage Updates
Hi Everyone! The new federal mortgage rules implemented two months ago starts today. Heres a quick run down of the key points…
Qualifying Rate
All borrowers must meet the standards for a five-year, fixed-rate mortgage, even if they choose a variable mortgage with a lower rate or a shorter term. What does that mean from TD’s standpoint? Home Equity Lines of Credits, Fixed Rate Mortgages of terms less than 5 years and all Variable Interest Rate Mortgages will be adjudicated based on the greater of the 5 Year Bank of Canada Benchmark Rate, or the actual customer rate (inclusive of customer discretion). So if you qualified for a $250,000 variable rate mortgage with a qualifying rate of 3.84% and today the qualifying rate has changed to 5.85%, this means that your income needs to be roughly 25% higher today than it was before. The 5 year Bank of Canada Benchmark rate is defined at the chartered bank – conventional mortgage 5 year mortgage rate, published by the Bank of Canada each Monday. To find the 5 year bank of Canada benchmark rate, click here.
Refinances
The maximum Canadians can withdraw when refinancing their mortgages drops to 90 per cent of the value of their home, from 95 per cent. Second homes now qualify for high-ratio insured financing if they have no more than one unit.
Rental Properties
Buyers must make now a minimum 20 per cent down payment, up from five percent, to qualify for CMHC insurance for non-owner occupied properties purchased as an investment.
Key Interest rates (April 19, 2010)
Qualifying rate = 5.85%
TD Prime = 2.25%
Next BOC meeting = April 20, 2010
No matter what type of mortgage financing you are looking for, it makes sense to speak to me first. I am available outside of normal banking hours, weekends and evenings to suit your schedule. Thank you!
Sincerely,
Josephine Ng
www.tdmortgage.wordpress.com
