Implications of the New Mortgages Rules
On January 17, 2011 Finance Minister Jim Flaherty announced that there would be some changes to the mortgage guidelines, these changes will take place on March 18, 2011. The one rule change that will affect homebuyers will see Ottawa stop backing home loans greater than 30 years if there down payment is less than 20%. Here is how the numbers play out for a single person buyer, possibly a first time homebuyer!
Income: $45,000 (Canadian average)
Debt: $3,000
Monthly Expenses: strata $200, heat $50 and property taxes $210
Down payment: 5%
Interest rate: 3.89% 5 year fixed
Amortization: 30 year
With a 5% down payment of $7,900 this person could look at purchasing a property for $158,000. Before March 18th the buyer could look at qualifying for a mortgage using a 35 year amortization. Using the maximum amortization schedule this buyer could increase their purchasing power by $22,000. If you are serious about buying, now is the time to do it.
DREAM TODAY. OWN TOMORROW.