On April 19th, 2010 the rules for government-backed insured mortgages will change. No longer will you be able to re-finance your home at 95%. 90% of the value of your home will be the maximum.
According to Jim Flaherty, Minister of Finance rules have been changed to support the stability of Canada's housing market and encourage home ownership of Canadians.
"Canada's housing market is healthy, stable and supported by our country's solid economic fundamentals," said Minister Flaherty. "However, a key lesson of the global financial crisis is that early policy action can help prevent negative trends from developing."
Minister Flaherty goes onto say that there is no evidence of a housing bubble, but the government is being prudent and cautious to help prevent one. In addition to the amount of money you can borrow against your home, two other changes will come into effect in April. Borrowers who choose a mortgage with a lower interest rate and shorter term will still have to meet the standards for a five-year fixed rate. This will help prepare buyers in the event interest rates inflate. Also, buyer's who are purchasing property that they will not be occupying will have to have a minimum of 20% down
In the event of a Housing Bubble like we saw in the United States in 2008 and 2009, these new rules will help Canadians maintain ownership.