Milligan Realty Ltd. Edmonton
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AREAhub Special Alert                   Change in CMHC mortgage rules July 9 2012

AREA wants to ensure our members are fully informed about changes in the industry that could affect your practice.
Today (June 21, 2012), the federal government announced amendments to government-backed mortgage standards
in Canada that will take effect on July 9, 2012. 

Jim Flaherty, Minister of Finance, announced the following changes to the standards governing government-backed 
insured mortgages:

  • the maximum amortization period was reduced from 30 years to 25 years;   
  • the maximum amount Canadians can withdraw in refinancing their mortgages was lowered to 80 per cent from 
    85 per cent of the value of their homes;
  • the maximum gross debt service ratio was fixed at 39 per cent and the maximum total debt service ratio 
    at 44 per cent; and
  •  the availability of government-backed insured mortgages was limited to homes with a purchase price of less 
    than $1 million.

Today’s announcement confirms Canadians will continue to be able to purchase a home with five percent down.   
Details of the announcement can be found 

In response to the announcement, AREA member and CREA President Wayne Moen issued the following statement:  

"We believe today’s announcement is a measured response to the government’s often stated concern about household 
debt levels and the housing market. That being said, we would remind the government that the re-sale housing makes 
a significant contribution to the economy, adding an estimated $20 billion in spin-off spending and over 165,000 jobs in 2012.


Recent statistics from The Canadian Real Estate Association indicate that the national housing market remains balanced. 
The impact of measures like those announced today must be closely monitored to ensure they have the anticipated 
impact and don’t create a spillover effect and slow the economy.


For these reasons, going forward, we would urge the government to consider the impact of further interventions in the 
market carefully.


REALTORS® and the government share a common interest in the value of homeownership and its contribution to the 
economy and the well-being of Canadians and our communities.


Property buyers and sellers should contact a REALTOR® if they are considering entering the housing or commercial 
real estate markets to better understand the impact of these changes in their communities."

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