Amortization Changes to 25 Years on July 9th

LRT Mississauga

Ottawa is reducing the maximum mortgage amortization period to 25 years from 30 years, and the maximum amount of equity homeowners can take out of their homes in a refinancing is being reduced to 80 per cent from 85 per cent.

Reducing the amortization period will increase monthly payments, but reduce the amount of total interest paid on a mortgage. Ottawa expects the change from a 30-year to 25-year amortization will, on a $350,000 mortgage loan at four per cent, increase the monthly payment $177 but reduce total interest costs by nearly $47,000.

1) Amortization Period is REDUCED to 25 years for less then 20% downpayment. Banks can continue to offer 30 year amortization on LTV’s 80% or less

2) Refinancing is REDUCED from 85% Loan To Value to 80%

3) Limit GDS to 39% and TDS to 44%

4) Homes above $1 Million must have 20% downpayment

 

How Will These Changes Affect You?

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