Interesting little change to the mortgage rules that came across the news wire today. The Finance Minister has announced two major changes to the current mortgage rules.
- The maximum Amortization period for a mortgage will be reduced from the current 30 years to 25 years
- Borrowing against the equity of your home is limited to a maximum of 80% instead of the current 85%.
I’m surprised at how long this actually took. To many people are buying homes they can hardly afford and it’s pretty pathetic that the government has to step in to stop people’s stupidity. Just goes to show how people have no control over their spending.
I took this picture on the news today to show the impact of that change. $400,000 is a pretty basic home these days here in Edmonton. Means people are going to have to settle for a less expensive home and see an increase in their monthly payment by $201 dollars. Obviously this is an example.
Like I said, pretty sad when the government needs to step in and curb our stupidity.