While the changes will make it easier for first-time buyers to purchase a home, they could wind up paying tens of thousands of dollars more in interest.
New federal rules would help homebuyers access lower mortgage rates for pricier properties and pay smaller instalments over a longer time period, but the changes would also allow borrowers to take on more debt and pay more interest on it.
Under the coming regime, set to take effect Dec. 15, buyers will be able to get a mortgage with default insurance – which is mandatory for those with less than 80 per cent of equity in their home – for properties worth as much as $1.5-million, up from a cap of $1-million.
The federal government, which announced the new rules Monday, will also allow first-time homebuyers to take a maximum of 30 years to repay an insured mortgage on any type of home. And all buyers, including investors, will have access to 30-year mortgages if they are buying a newly built home. Until recently, buyers with less than 20-per-cent down could take a maximum of 25 years to repay their debt. click here to read more
Article C/O North Shore News | Globe & mail
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