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For immediate release
Ottawa, July 9, 2008
The Government of Canada today announced adjustments to the rules for government
guaranteed mortgages aimed at protecting and strengthening the Canadian housing
market. The new measures include:
- Fixing the maximum amortization period for new government-backed mortgages to
35 years;
- Requiring a minimum down payment of five per cent for new government-backed
mortgages;
- Establishing a consistent minimum credit score requirement; and
- Introducing new loan documentation standards.
Today's announcement marks a responsible and measured approach by the Government
to ensure Canada's housing market remains strong and to reduce the risk of a U.S.-style
housing bubble developing in Canada.
The new limits are planned to take effect October 15, 2008. This would allow existing
mortgage pre-approvals with the common 90-day duration to be used or expire. Certain
exceptions would also be permitted after October 15. The Government will work closely
with all stakeholders to ensure timely and effective implementation of these measures.
As these measures relate only to new, government-backed insured mortgages, Canadians
who already hold mortgages will not be affected by this announcement.
The measures announced today will build on the strength of Canada's housing market.
According to the International Monetary Fund, the increase in house prices in Canada is
based on sound economic factors such as low interest rates, rising incomes and a growing
population. A recent Statistics Canada report concluded that home ownership is at record
levels, with over two-thirds of Canadians owning their own home.
Mortgage arrears--overdue mortgage payments-have also remained low. In recent
years, the percentage of mortgages in arrears for three months or more continues to be at
low levels not seen since 1990.
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