Federal Government To Change Mortgage Rules

John Pasalis in Toronto Real Estate News

Finance Minister Jim Flaherty is set to announce stricter rules that dictate how banks approve mortgages. 

From the Globe and Mail:

The changes to be announced Tuesday will ensure that banks add an extra level of assurance into their evaluations when they are weighing whether to approve a mortgage. The goal is to ensure that the bank is comfortable that the borrower will be able to afford the monthly payments when interest rates rise.

From the CBC:

There has been speculation that Flaherty might raise the minimum down payment on a home — now five per cent — and lower the maximum amortization period for mortgages — currently 35 years.

Sources have told CBC News that those measures are not part of Tuesday's announcement. However, they could be considered in the future.

More to come....

John Pasalis is the Broker owner of Realosophy Realty Inc in Toronto. Realosophy Realty focuses on researching Toronto neighbourhoods to help their clients make smarter real estate decisions.

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