Canada, 18th January: New home buying rules targeted to tighten mortgage lending are likely to affect the Canada real estate market and the first-time home buyers are going to be worst hit by these changes.
This has been stated by a local real estate board president.
The new mortgage rules will curb increasing Canadian household debt in addition to providing a stability in the Canadian housing market.
According to TD (Toronto-Dominion) Bank, the new mortgage rules will bring down the annual home sales by nearly 20,000.
The rules announced by Jim Flaherty, Canadian finance minister, might also pull sales by potential home buyers in a bid to beat the new rules.
According to a senior economist with TD, Paul Gauthier, existing sales of homes had been already predicted to go down by around 8 percent as compared to the year 2010 and the home prices are likely to slip by around 1 percent.
The changes by Mr. Flaherty announced in Ottawa state that Canada will stop supporting mortgages having amortization period more than 30 years. Mr. Flaherty announced withdrawing support for mortgages of 35 years period apart from cutting back federal support for HELOC(home equity lines of credit) where people borrow money against their homes to be used for reasons other than either buying or refinancing the home.
Mr. Flaherty, who was accompanied by the Minister of Natural Resources, Christian Paradis, Canada has a highly regulated housing sector which has been instrumental in extending strength to the nation in the times of economic crisis.
The changes in the Canada mortgage rules will give a stimulus to the hard-working Canadians to invest their savings in houses for safeguarding their future, Mr. Flaherty asserted.
And the reason for reduction in the maximum amortization period from 35 to 30 years is to help mortgagors to pay back their household debts at the earliest and bringing down the interest on their loan amount.
Meanwhile, amount of monthly payments for Canadian mortgagors will go up due to reduction in the amortization period of the mortgage.
And the maximum amount allowed to be borrowed by a Canadian for refinancing their mortgages will be equal to 85 percent of the home value so as to help Canadian families focus more towards savings while restricting their ability to borrow.
Also, Canadians wanting wanting a federal-insured mortgage for buying a house that will not be
used for living by them will be required to make a down-payment of 20 percent from the earlier down-payment of five percent.
This has been stated by a local real estate board president.
The new mortgage rules will curb increasing Canadian household debt in addition to providing a stability in the Canadian housing market.
According to TD (Toronto-Dominion) Bank, the new mortgage rules will bring down the annual home sales by nearly 20,000.
The rules announced by Jim Flaherty, Canadian finance minister, might also pull sales by potential home buyers in a bid to beat the new rules.
According to a senior economist with TD, Paul Gauthier, existing sales of homes had been already predicted to go down by around 8 percent as compared to the year 2010 and the home prices are likely to slip by around 1 percent.
The changes by Mr. Flaherty announced in Ottawa state that Canada will stop supporting mortgages having amortization period more than 30 years. Mr. Flaherty announced withdrawing support for mortgages of 35 years period apart from cutting back federal support for HELOC(home equity lines of credit) where people borrow money against their homes to be used for reasons other than either buying or refinancing the home.
Mr. Flaherty, who was accompanied by the Minister of Natural Resources, Christian Paradis, Canada has a highly regulated housing sector which has been instrumental in extending strength to the nation in the times of economic crisis.
The changes in the Canada mortgage rules will give a stimulus to the hard-working Canadians to invest their savings in houses for safeguarding their future, Mr. Flaherty asserted.
And the reason for reduction in the maximum amortization period from 35 to 30 years is to help mortgagors to pay back their household debts at the earliest and bringing down the interest on their loan amount.
Meanwhile, amount of monthly payments for Canadian mortgagors will go up due to reduction in the amortization period of the mortgage.
And the maximum amount allowed to be borrowed by a Canadian for refinancing their mortgages will be equal to 85 percent of the home value so as to help Canadian families focus more towards savings while restricting their ability to borrow.
Also, Canadians wanting wanting a federal-insured mortgage for buying a house that will not be
used for living by them will be required to make a down-payment of 20 percent from the earlier down-payment of five percent.
