Mortgage rule changes go into effect today

Beginning today, lending institutions can only issue home equity loans up to a maximum of 80%, down from 85%, of a property’s value.

In addition to the increase in the minimum down payment, the federal government has reduced the amortization period to 25 years from 30 years, capped the maximum debt ratios for households and limiting government insurance to mortgages on homes with a purchase price of less than $1 million.

What are we likely to expect in the coming months in the Toronto Real Estate Market?  Nearly right away, we’ll see both the pre-construction and resale condo markets affected by the changes and eventually a cooling of the housing market as a whole for the fall market.