Government Set To Crack Down On Mortgages...Again!

The Globe and Mail is reporting that Ottawa is set to clamp down on the mortgage market once again with a package of measures to deal with Canadians’ record levels of household debt.

The Finance Department is expected to announce as early as Monday morning that Ottawa will reduce the maximum amortization period from 35 years to 30; Lower the maximum Canadians can borrow in refinancing their mortgages from 90% to 85%; and withdraw government insurance backing on home equity lines of credit. 

The first 2 measures are set to come into effect March 18, 2011, while the changes to the insurance on the HELOC's will take affect one month later on April 18, 2011.

There had also been talk about a 4th measure that would have seen 100% of the Condo fees used in the qualification process for Canadian Condo purchasers, up from the 50% presently used, but this measure will not be implemented at this time
   
This latest crackdown may in part have been fuelled by statistics published in late 2009 showing that  the debt levels of Canadian households has risen to record levels. The average debt per household, including mortgage and credit card debt, reached $96,100 in 2009, while household debt reached 146 per cent of personal disposable income.

These measures continue the recent trend of the Canadian government taking steps to protect Canadians from themselves by making mortgage money a bit tougher to come by and theoretically helping them manage their debt loads.

Domenic Mirabelli
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http://www.thescooponmortgages.com/

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