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Federal government tightens mortgage rules
June 21, 2012
On June 21, 2012, Ottawa tightened rules on mortgage lending in the country, reducing the maximum amortization period to 25 years, down from 30.
Here's a visual look at how these changes (effective July 9) would affect one homeowner's mortgage payments using a five per cent sample interest rate.
Sources: Canada Mortgage and Housing Corporation mortgage calculator,
Canadian Real Estate Association, CBCNews.ca
[by Ruby Buiza/CBC]
BEFORE JULY 9
Amortization: 30 years
Monthly payment: $2,004.57
Total interest cost: $346,039.79
Refinancing limit: 85 %
STARTING 9
Amortization : 25 years
Monthly payment: $2,184.54
Total interest cost: $279,756.22
Refinancing limit: 80 %
OTHER CHANGES
Limit CMHC insurance to homes priced under $1 million.
Buyer of a home priced higher than $1 million must have 20 per cent or at least $200,000 down.