Saturday, March 13, 2010

Clarification of the new mortgage regulations when purchasing real estate in Ontario

Clarification of the new mortgage regulations when purchasing real estate in Ontario

The minimum down payment continues to be 5% for real estate purchases. There seems to be no plans to change this rule.
The new 10% equity rule applies to when you are refinancing your home, not on a purchaseonly.
The 20% minimum down payment rule applies to non-owner occupied (rental properties or investment properties) only.

All mortgages now need to be qualified on 5 year rates. This means that the rules have tightened somewhat.
In the past, 1,2,3 year, and variable rate mortgages were qualified based on the 3 year mortgage rate. This means that some homebuyers who have qualified in the past may not qualify under the new regulation if the debt service ratios were too close to the guidelines. It's a very slight change, but important for people who were very close to the maximum guidelines.
I hope this finds you Happy and Healthy!

All the Best!

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate


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