贷款条件的变化及其影响

The changes became effective April 19, 2010 should have little impact on the housing market. Despite what some reports are saying, the percentage of home buyers impacted by these changes is small.

So what changes were made? Here is a summary.

1) All borrowers must now qualify under a 5 year fixed mortgage rate even if a shorter term with a lower interest rate is chosen. How big of an impact is this? As an example: prior to the change - a couple purchasing a $350,000 home with 5% down would require an annual income of $61,039.12. That figure has now gone up to $64,301.25, a difference of $3,262.13/year in salary.

2) The government also lowered the maximum amount that homeowners can refinance their mortgage from 95% to 90%. How much of a difference is this? Again using a house value of $350,000, a homeowner under the new rules will be able to refinance up to $315,000 as opposed to $332,500 ( a difference of $17,500).

3) Lastly, the government has increased the minimum down payment required on non-owner occupied properties purchased to 20%. This is for government-backed mortgage insurance properties purchased largely by speculators in the market.

“We want to discourage the tendency some people have to use a home as an ATM, or buy three or four condos on speculation” Flaherty commented at a press conference in Ottawa. Of note is that lenders and mortgage insurers have long been discouraging any refinances up to 95% so again this will have little impact on the refinance market as it stands today.