Expert Advice

The changing landscape in Canadian Mortgages


The proposed mortgage changes announced by Jim Flaherty, Minister of Finance last Thursday come into effect on July 9th.  The government announced 4 changes that will affect what clients can afford and what can be approved by the lenders.

Here are the highlights:

-Lowering of the maximum allowed amortization for insured mortgages from 30 years to 25 years;

-Lowering the limit when refinancing to 80% of the value of their homes;

-Fixing the maximum gross debt service ratio at 39% and total debt service ratio at 44%;

-Limiting the availability of government-backed insured mortgages to homes with a purchase price of less than $1 million;

These changes are designed to restrict the borrowing capacity of home buyers and home owners.  They also increase homeowner’s minimum possible monthly payments by approximately 10% or roughly $200 a month, and lower the amount of mortgage they qualify for a new home purchase by approx 15%.


These proposed changes affect purchases with less than 20% down.  What if you are in that boat?  There are lenders that are not accessible to the average Canadian directly.  Mortgage Agents have access to over 70 lenders aside from the big 5.  For example in the high ratio range between 15% and 19.9% downpayment 30 year amortizations will still be possible, total debt service ratios can go as high as 50% instead of 39%.  Lenders both institutional and Private will consider down payments as low as 10% down.  With this many lenders, a Mortgage Agent is your key to lower monthly payments and access to those properties that will soon be out of reach.

Katerina Papas

President, Mortgage Express Canada  905 – 709 – 3020

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