CMHC Mortgage Changes - March 18th, 2011
Some big news this morning regarding some upcoming changes to both mortgage amortizations and refinance loan to values. Please note that these changes come into effect on March 18, 2011.
Maximum Amortization - 35 to 30 Years
For the average purchaser this will not make much of a difference. As with last year, when we moved from a maximum of 40 years to 35 years it did not have the negative impact we feared, as lenders worked hard to get even 1st time home buyers to fit into their debt service guidelines. We'll need to do more of the same this time around. With interest rates at all time lows this shouldn't be an issue. **Note. All purchasers can continue to purchase with a minimum of 5% downpayment!**
Loan to Value Changes on Refinances ONLY
Of the two changes coming into effect, the change to loan to value limits on refiances will have the biggest impact. Effective March 18th, 2011 clients will only be able to withdraw up to 85% of their home's current value (as opposed to 90%). This represents at drop of 10% in the amount of equity that we can refinance from two years ago.
I would be happy to speak with anyone that has any questions. I can always be reached (including evenings and weekends) at (705)725-3734 or via e-mail at Trevor1.Reid@bmo.com.