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The Government of Canada announced today…

three changes to a high-ratio, insured mortgage effective April 19th, 2010.

Here is the impact for each of the three changes to be implemented:

1. The first change is that qualifying for a new mortgage will be calculated using the higher five year fixed rate term instead of the three year fixed rate term. You can still choose a lower interest rate or a shorter term but qualifying will be on the higher five year fixed rate term.

2. The second change is that the maximum one can withdraw in refinancing their mortgage will be reduced to 90% from the current 95% of the value of one’s home.

3. The third change is that for non-owner occupied properties, a minimum down payment of 20% will be required instead of only 5%. Borrowers purchasing an owner-occupied property with a rental unit attached (ie duplex) will still be able to qualify with a 5% down payment.