Current Market Trends

How do the new CMHC Mortgage Rules Affect You:

Sunday, June 24, 2012

Finance Minister Jim Flaherty announced Thursday that the federal government is reducing the maximum amortization period for a government-insured mortgage to 25 years from 30 years.

It’s the third time the Harper government has reduced the maximum amortization period in the last four years, after it initially increased the lengths of mortgage terms to make it easier for Canadians to purchase homes.

The government has since ratcheted it back from 40 years to 35 in 2008, and then further reduced it to 30 years in 2011.

If you are not familiar with this news:
1.    CMHC (Canada Mortgage and Housing Corporation) is tightening up their rules – this will only affect you if you are putting down less than 20% of the purchase price of your home.
2.    The amortization will be reduced from the current 30 years to 25 years which will increase the monthly payment and you will thus be approved for smaller mortgage.
3.    If you are purchasing a property of $1M or greater you will no longer qualify for the CMHC insurance and will thus require a minimum of 20% down to be approved for such a property.
4.    If you are putting down a minimum of 20% you will still qualify for a 30 year amortization as you will not require the CMHC insurance.
5.    If you are in contract before July 9th on a home you can take advantage of the current benefits, after July 9th the new rules will apply.

So now might be a good time to pull the trigger on a property if you have been in the market, this time they didn’t even allow 3 weeks lead time before the change so you will have to move quickly in order to come in under the July 9th deadline.  Otherwise, you might have to wait and save up a larger down-payment in order to be approved for the same property post July 9th.

As always if I can be of any assistance please contact me.

Happy hunting and good luck!






"I was referred to Paul from a good friend who worked with him in the sale of her condo in Toronto. After meeting with Paul, I was really impressed by his professionalism, humour and raw honesty. Paul came prepared to each meeting and gave a lot of advice on staging and "to do's" before listing my property and to ensure it was ready for video and photos. I am a believer that the video and photos were critical to my listing, and was totally worth rescheduling and reconfirming due to weather! In the end, Paul placed my property in a multiple offer scenario and we sold over asking in less than one week.
Once the deal was firm, we began the search for a new property. Paul was great in dealing with my busy schedule and sharing his advice on the properties we viewed, always listing the pro's, con's and resale in mind. We endured a very long and drawn out offer/sign back process (upwards of 6 sign backs with an extremely unprofessional Listing agent) that was exhausting and at no point did he ever show his frustration, even when the deal went flat. In the end, we did find the perfect property and this time it was seamless and we were able to avoid the multiple offer scenario through his smooth negotiations.

I have already referred Paul to a colleague and would have no problem referring others. Overall, a great experience!"
~ Sou Choi