On Tuesday, Feb. 16th, 2010, the Government of Canada announced new rules for government-backed mortgages. These rules are being implemented to prevent a "U.S. Style" meltdown of the housing market, and should have little or no impact on home buyers.
The government had been contemplating on increasing the minimum down payment required to buy a house from 5% up to 10%. This WOULD have had a severe and negative impact on the housing market.
Bo Kauffmann of Re/Max Performance Realty comments :"I'm happy to see that they left THAT rule alone. Our hot market is largely driven by first time buyers, who in most instances have 5% saved, but many would NOT be able to come up with 10%.
Bo summarizes the rule changes in this way:
1) Buyers need to qualify for the posted 5-year mortgage rate (and not simply a lower, introductory rate)
2) Home-owners can re-finance their homes and borrow up to 90% of the home's value, down from the current 95%
3) Investors now have to come up with at least 20% down when purchasing residential properties NOT being occupied by the investor himself.
For more indepth analysis of these changes and how they might effect you, see Bo's blog post at Winnipeg's Real Estate Blog at http://bokauffmann.com/
