This morning the Federal Department of Finance announced that the maximum amortization for CMHC insured mortgages will be reduced from 30 years to 25 years on July 9, along with a few other changes. We've been expecting this change for quite some time, the only surprise for me is the short deadline. The government expects the changes will affect less than 5% of home buyers.
The other changes announced include:
- Lowering the maximum Canadians can borrow against their home from 85% to 80%
- Fixed maximum gross debt service ratio to 39% (percentage of income available for mortgage payments) and maximum total debt service ratio to 44%
- Limiting CMHC insured mortgages to home purchases less than $1million
The changes are actually quite small, and we don't expect them to have much of an impact on the market in Edmonton.
The other mortgage related change came from CIBC... They are winding down "Firstline" mortgages unit which means if you want a mortgage through CIBC you won't be able to go through a mortgage broker, only their in house specialists. The Royal Bank and BMO also only take mortgages through in house brokers or specialists.