Get the latest investment and property management advice for Winnipeg property owners. See our newest house, condo and apartment rental vacancies.

Wednesday, February 17, 2010

Government Announces Major Changes to Mortgage Lending: How Will It Affect You?

Finance minister Flaherty announced yesterday morning the following major changes to the mortgage industry:

  • people applying for variable rate mortgages will have to meet the more stringent standards applied to a 5 year fixed rate mortgage
  • people will only be allowed to re-finance up to a 90% loan-to-value (LTV) as opposed to the previously allowed 95%
  • people buying a home they don't intend to occupy will require a 20% down payment

What does this mean to an investor? Plenty!

If you were one of those investors that pulls money out of their current rental property up to 95% and then turns around and purchases a new rental property using a 15% down payment, you now have to re-think your strategy.

Is this a bad thing? In our opinion, not really. The move means that only "serious" investors are going to be buying houses, which is not a bad thing. If an investor is not ready or strong enough financially to get into a rental property, this will protect them from making some fatal errors. And qualifying people based on a variable rate payment is irresponsible and mirrors the mistakes that happened in the US.

It also stabilizes the economy (the Canadian dollar was up more than a cent 4 hours after the announcement) and as a result housing prices will stabilize across the country and will hopefully continue their upward trend.

Got questions? Email us at

GaraMark Property Management is located in Winnipeg, Manitoba and successfully balances protecting the investment of an owner while retaining happy tenants.

Labels: , , , , ,


Post a Comment

Subscribe to Post Comments [Atom]

<< Home

News Archive

Modern Earth Website Design, Winnipeg Manitoba, Canada