MORTGAGE INSURANCE RULES ANNOUNCEMENT

Federal Finance Minister Jim Flaherty announced prudent changes to mortgage insurance rules intended to come into force on April 19, 2010. The changes are as follows

All borrowers must meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term;
The maximum amount one can withdraw in refinancing their mortgage will be reduced to 90% from the current 95% of the value of one's home;
Non-owner occupied properties will require a minimum down payment of 20%. Currently you can purchase an investment property with 5% down payment.

There were no changes to down payment requirements or length of amortizations for owner-occupied residences.