How the rules have changed
Canada’s housing rules have been revamped six times since 2008.
1. October, 2008: Ottawa reduces the maximum amortization period to 35 years, effectively killing the 40-year mortgage; introduces a 5-per-cent minimum down payment and tightens loan documentation standards.
2. April, 2010: The government clarifies debt-servicing standards, limits refinancing to a maximum of 90 per cent of the property value and imposes a minimum 20-per-cent down payment on investment properties that are not occupied by the owner.
3. March-April, 2011: The government reduces the maximum amortization period to 30 years, limits refinancing to a maximum of 85 per cent of the property value and withdraws government guarantees on low loan-to-value non-amortizing secured lines of credit.
4. July, 2012: Reduces the maximum amortization period to 25 years, limits refinancing to a maximum of 80 per cent of the property value, imposes a maximum total debt service ratio of 44 per cent, a maximum gross debt service ratio of 39 per cent and introduces a maximum purchase price of less than $1-million.
5. February, 2016: Imposes a minimum down payment of 10 per cent for the portion of a house priced above $500,000.
6. October-November, 2016: New stress tests ensure that the debt-servicing standards for all insured mortgages must meet either the mortgage contract rate or the Bank of Canada conventional five-year posted mortgage rate (whichever is higher). As well, eligibility criteria for high- and low-ratio insured mortgages will be standardized.
Source: Department of Finance
--- David Berman