New mortgage rules have Canadians scrambling to get in under the wire

The surprise announcement that mortgage rules will change again on July 9 has many homebuyers scrambling to get in under the wire with the old rules.


These latest new rules – amortization limit of 25 years and refinance limits of 80 per cent - are designed to lower debt levels, enforce some belt-tightening, and promote savings through home ownership. You should get in touch with me now if you are planning to buy or have a mortgage pre-approval with an amortization of 30 years. You must have an agreement of purchase and sale before July 9 in order to keep that amortization, and any new applications before July 9 must fund by December 31, 2012


If you are an existing homeowner, the new parameters will only apply if you need to increase the amount of your insured mortgage


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Today’s Bank of Canada rate hold announcement marks almost four straight years that the key benchmark rate has remained unchanged, since September 8, 2010. Great news if you have a variable-rate mortgage or home equity line of credit; the prime rate stays at 3%.


The announcement noted that “the risks to the outlook for inflation remain roughly balanced, while the risks associated with household imbalances have not diminished.” With these considerations, the Bank is maintaining its monetary policy stimulus, and remains neutral with respect to the timing and direction of the next change.


The next rate-setting day is October 22nd.

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