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Federal Government Changes to Mortgage Lending

For the fourth time in as many years, the Federal Government has announced action to restrict mortgage credit. The new measures include:

•The maximum amortization on a prime mortgage will be reduced from 30 to 25 years.
•Mortgage insurance will not be provided for properties valued over $1 million.
•Refinancing has been lowered from a maximum of 85% loan-to-value to a maximum of 80% loan-to-value.
•The maximum gross debt service (GDS) and total debt service (TDS) will be limited to a maximum of 39% and 44% respectively. Currently, GDS does not apply to qualified borrowers with credit scores over 680.


These measures will take effect July 9, 2012.

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