The federal government’s deadline is coming up fast. As of March 18th Canadians will no longer be able to refinance up to 90% of the value of their homes. It is being reduced to 85%, meaning that 15% of your home equity will become ‘untouchable’. In addition, the maximum amortization on ‘all’ mortgages will be reduced to 30 from 35, further tightening the housing affordability index.

On a $300,000 property this will mean $15,000 less available to payoff consumer debt. If your current mortgage equals 85% of value, then you will no longer qualify for a refi.

Effectively, only those with conventional loans 80% or below can refinance. The move comes at a bad time, since property values have levelled off, and may not increase much in the next 5 years or so. So this is your last chance to pay off that consumer debt.

We certainly hope that the government does not move to make the minimum down payment 10% instead of 5% because it is totally unnecessary, but it could happen. A very popular move would be for them to legislate lower interest rates and fees on credit cards, giving people a better chance to pay down high interest debt.

So those of you contemplating buying a home and want to take advantage of the maximum amortization giving you the minimum payment, then you should buy a home before March 18th.

The prospect of increased interest rates now appears all but certain this year so once again, take advantage by acting now while it is a ‘buyers market’, and make the best deal you can. Call us today, and we will get you the lowest rate possible.