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Tuesday, February 1, 2011 - New Mortgage Rules Starting March 18

Higher interest rates will raise homeownership costs.

We expect the Bank of Canada will resume its rate hiking campaign by the second quarter of 2011, which will eventually have a more sustained upward effect on mortgage rates. In our view, higher mortgage rates will be the dominant factor raising homeownership costs over the medium term. As a home buyer, the new rate changes WILL affect affordability to the tune of around $25,000. Assuming you can afford a 400k home, your affordability will decrease to 375k due to the shorter amortization allowable (30 yrs max) for those buyers with CMHC insured mortgages (conventional borrowing with 20% down can still go to 35 year amortization). The 35 year amortization is great because the monthly output is less, yet still allows you to put up to 20% of your mortgage amount down in any given year without penalty. Contact me for more information or if you have questions how it affects you.

posted in General at Tue, 01 Feb 2011 19:12:18 +0000

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RE/MAX Landan Real Estate 
#102, 279 Midpark Way SE
Calgary, Alberta T2X 1M2