Tighter mortgage rules will hit B.C. the hardest
VANCOUVER -- Tighter mortgage rules announced Monday by the federal government will have a disproportionate effect on the purchasing power of homebuyers in Metro Vancouver.
Amid rising concern about increased household debt in Canada, Federal Finance Minister Jim Flaherty cut the maximum amortization period from 35 years to 30 years and tightened the rules for mortgage-backed lines of credit. Canadians will only be able to borrow up to 85 per cent of the value of their homes, down from 90 per cent.
And Ottawa will no longer insure the popular home equity lines of credit.
The amortization change, which affects purchases with a down payment of lower than 20 per cent, means somebody with a four-per-cent rate on a $300,000 mortgage would pay about $100 a month more.