17 January 2011
This will help Canadians save more money through homeownership and slow the mortgage consumer debt growth.
3. The government will eliminate its insurance backing on lines of credit secured by homes – HELOC. It means that the risk of consumer debt growth concerning mortgage market will lie on the financial institution and not on the Canadian taxpayers.
From our previous experience – all contracts signed before March 18 (some lenders may implement changes earlier) will be eligible for old rules and guidelines even if closing day is after that. Pre-approvals will not be honored – good only for rate hold – not extended amortization. We are expecting more clarification for government, insurance companies and lenders and will update you with more details.