30 is the new 35

Most people will have heard the news announced by the federal government on Monday about the new mortgage rules that will take effect this spring. There are three main changes: the maximum amortization on federally insured mortgages will now be 30 years instead of 35; the maximum equity takeout on a refinance will be 85% instead of 90%; and home equity lines of credit will no longer be insured by Canada Mortgage and Housing Corporation (CMHC). These measures were designed to protect home equity from consumer debt and to ensure that new homeowners are able to manage increases in interest rates. It will remain to be seen what other effects they will have on Canada’s housing market.