• 100% financing (5% will now be the minimum down payment on an insured mortgage)
• 40 year amortizations (35 years will be the new maximum on insured mortgages)
The government will also require the following with all new mortgages it insures:
• A new 620 minimum credit score requirement
• New loan documentation standards
The new rules will take effect October 15, 2008. This affects CMHC insured mortgages as well as mortgages insured by Genworth, AIG, etc. Insured mortgages are generally those with less than 20% down.
Certain conventional mortgages are also insured, however, in a statement from the Department of Finance said, "Today’s announcement marks a responsible and measured approach by the Government to ensure Canada’s housing market remains strong and to reduce the risk of a U.S.-style housing bubble developing in Canada.
"These new rules pertain only to new, government-backed insured mortgages. This will not affect existing mortgages."