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

1. 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. 

2. 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. Very rarely will a 95% refinance situation come into play. 

3. Non-owner occupied properties will require a minimum down payment of 20%. To avoid additional costs, i.e. premiums, most clients have 25% for down payment on income properties. If a client only has 20% for down payment, the premium that CMHC charges is 2.5%. All income property qualifications are based on 25 year amortization. This has not changed. 

4.There were not any changes to down payment requirements or amortization for owner occupied properties.

by: Ester Derry Scotia Bank Canada

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