OTTAWA - Finance Minister Jim Flaherty is tightening mortgage rules to make it harder for people to buy or borrow on their homes.
Flaherty says changes to CMHC rules will cut the maximum amortization period for mortgages to 25 years from the current 30 years.
The changes will also limit refinancing loans to 80 per cent of the value of a home, from the current 85 per cent.
The latest moves are part of a string of initiatives undertaken recently by the federal government to slow the accumulation of debt by Canadian households, which reached a record 152 per cent of income in the fourth quarter of last year.
This will mark the fourth time Ottawa has tightened mortgage rules since 2008.
Central bank governor Mark Carney has been warning for several years that some Canadians are getting in over their heads with debt, and that they could face problems once interest rates — which sit at historic lows — start rising or if there is a second economic crisis.
Source- Yahoo Canada
It seems that our Finance Minister is up to it again, our government is poised in protecting our economy. With Mark Carney reminding Canadians that our homes should not be used as ATM machines, the govenment had to act so that our marketplace does not suffer an economic collapse as other countries have.
From a Toronto real estate prospective even though it will become more difficult for home buyers to secure financing, this change was necessary. I expect others to follow in the coming year if and when interest rates begin to rise.