Wednesday, March 31, 2010

Below is a summary of the inpending changes to mortgage qualifying and how it will affect you. If you have any questions please feel free to call me @ 403 620 0164.

The Government of Canada - announced a series of regulatory changes to support the
long-term stability of Canada’s housing market. The Government has now provided the
following details in relation to these changes.
Effective April 19, 2010, Qualifying Interest Rates guidelines will change as follows:
1) Fixed Rate Mortgages with terms less than 5 years and all Variable Interest Rate Mortgages
will have to qualify based on the greater of the 5 Year Bank of Canada Benchmark Rate**, or
the contractual rate.
2) Fixed Rate Mortgages of terms 5 years or greater will qualify based on the contractual rate.
**The Bank of Canada Benchmark Rate is defined as the Chartered Bank – Conventional
Mortgage 5-year Mortgage rate, published by the Bank of Canada each Monday, and can be
found at
The four key changes associated with this announcement are:
1) Borrowers will need to be able to afford a five-year fixed rate mortgage, even if
they choose a mortgage with a shorter duration.
2) Investors, who want to buy a home that they don't plan to live in, will have to
make a minimum down payment of 20%.
3) Canadian home owners will only be able to Refinance to a maximum of 90% of
their home value, down from 95%.
4) Effective April 9, all Self-employed borrowers with greater than 3 years selfemployment
history and all commissioned borrowers, regardless of tenure, will no
longer be eligible for the stated income program.

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