Canada is tightening the mortgage rules to prevent another housing bubble.
ďThe government plans to require all borrowers meet standards for a five-year fixed-rate mortgage, even if they opt for a loan with a lower rate and shorter term,Ē
ďThe maximum amounts that can be withdrawn in refinancing a mortgage has been cut to 90% from 95% and a minimum down payment of 20% will be required for government-backed mortgage insurance on properties bought for speculation.Ē
The housing market has recovered nicely in Canada and currently nobody is anticipating a housing bubble. However, now is the time to take preventive measures.
Hopefully this will prevent another housing bubble from occurring, and when the next housing bubble occurs in USA (and it most certainly will, Americans have a visceral dislike of regulation of any kind), we will be shielded from it here in Canada.
Canada tightens mortgage rules to stop housing bubble (external - login to view)