The Federal Government today announced three changes to existing rules governing lending criteria for residential real estate;
1. The maximum amortization period is reduced from 35 years to 30 years.
2. The maximum amount of the value of a home that can be re-financed will drop from 90% to 85%.
3. Government insurance will no longer be available to financial institutions wishing to insure home equity lines of credit.
All of these changes are designed to ensure that borrowers do not borrow more than they can repay.
A link to the government announcement is here - http://www.fin.gc.ca/n11/11-003-eng.asp
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