- Joined
- Jan 29, 2008
- Messages
- 1,025
The CMHC announced a number of changes, including:
1. Amortizations reduced to 25 years
2. Refinancing limited to 80%
3. Properties purchased at over $1 million no longer eligible for mortgage insurance
4. GDS and TDS set at 39% and 44%
5. HELOCs limited to 65%
Some of these will have more impact on investors than others. Obviously going to 25 from 30 reduces cashflow slightly, and HELOCs limited to 65% could reduce sources of downpayment. It'll be interesting to see how much grandfathering is done with existing HELOCs, and whether banks let borrowers switch them to an amortizing product without requalifying.
In terms of number 3, I'm curious to know if that applies to multi-unit properties as well. Because if so that's a huge change to the apartment sector, and would probably hurt prices as funding gets more expensive. If it's only single family dwellings then it will mostly affect luxury home buyers.
Michael
1. Amortizations reduced to 25 years
2. Refinancing limited to 80%
3. Properties purchased at over $1 million no longer eligible for mortgage insurance
4. GDS and TDS set at 39% and 44%
5. HELOCs limited to 65%
Some of these will have more impact on investors than others. Obviously going to 25 from 30 reduces cashflow slightly, and HELOCs limited to 65% could reduce sources of downpayment. It'll be interesting to see how much grandfathering is done with existing HELOCs, and whether banks let borrowers switch them to an amortizing product without requalifying.
In terms of number 3, I'm curious to know if that applies to multi-unit properties as well. Because if so that's a huge change to the apartment sector, and would probably hurt prices as funding gets more expensive. If it's only single family dwellings then it will mostly affect luxury home buyers.
Michael