Advisor.ca | New Mortgage Rules Will Affect Clients
As of today, Canadian mortgage rules changed. But many homeowners aren’t familiar with the alterations or how they’ll affect their mortgages going forward, says a BMO poll.
Lenders can now only issue home equity loans up to a maximum of 80% of a property’s value, down from 85%, and the maximum amortization period has dropped from 30 years to 25 years—giving borrowers less time to repay their household debt.
Read: Mortgage repayment is possible: CIBC
The poll revealed almost half (49%) of Canadians are unfamiliar with the new measures put in place by Finance Minister Jim Flaherty. And even less (45%) realized the amortization period has been shortened by five years, with a quarter (26%) saying it’s more than 30 years.
It’s important that Canadians remain up-to-date on rules and regulations that have a direct impact on their financial plans, goals and overall stability, says Laura Parsons, mortgage expert at BMO.