Tuesday, April 24, 2007

Lower Mortgage Down Payments

Sorry I am a little late on this one. The federal government passed a bill to lower the mortgage downpayment requirement to 20%.
"The new legislation within Bill C-37 affects all mortgages or loans on residential property and requires that borrowers carry mortgage default insurance when the loan-to-value exceeds 80 per cent. The previous 75 per cent maximum loan-to-value had been in place for 40 years."Source RBC

This will really help people in overpriced markets. Take Vancouver where housing affordability for a two story home is at 73.5% of local median household income that 5% will make a difference in the outrageous amount new home buyers must save to get into the housing market. No wonder the cottage industry over there is grow- ops in the basement. How else could anyone afford a house?