Canadian Government has announced four major changes for mortgage rules.
Summarized are the four changes below to take place effective :
1) All Insured mortgages (mortgages with less than 20% down, plus all mortgages which are insured by the lender) will now be qualified using the Bank of Canada rate of 4.64% instead of the actual rate given to the home buyer. So what this means is that previously someone making $100,000 could get a mortgage $550,000 (about 5.5 times income), now the mortgage limit would fall to $490,000 (about 4.9 times income).
2) Insured mortgages are restricted to Three (3) criteria's. First - the property must be under $1 million; Second - the mortgage is limited to 25 year amortization; and Third - the credit score must be 600+ beacon.
3) Upon sale of your primary home, the sale must be disclosed to the Canada Revenue Agency (CRA) for review, to confirm Capital Gains Exemption, the purpose of this is directly towards foreigners, who buy and sell homes in major areas like Vancouver and Toronto, to help reduce speculative buying and selling.
4) Lenders and banks will be asked to share in the loss of any mortgageswhich default, hence not putting the full pressure on the Canadian government.
Here are a few articles explaining the changes:
nds.com/canadian_mortgage_tren ds/2016/10/is-this-the-last-na il-in-the-coffin.html
/real-estate/four-major-change s-to-canadas-housing-rules/art icle32223470/