It seems that things do get accomplished when the government is prorogued!  Finance Minister, Jim Flaherty announced yesterday that there are going to be some new rules regarding mortgages effective April 19, 2010.  

Investors, who are buying a home that they will not be living in, will have to come up with 20% as a downpayment for insured mortgages, which sounds reasonable.  Whenever I crunch the numbers for my investor clients, 30 - 35% down is the right number if you want to break even or see any profit.  

Another new rule is that purchasers will have to pass an income test based on a five year rate, even if they choose a lower rate with an open mortgage.  Five years down the road, if rates increase, they'll still be able to afford their mortgage.  

The third part of this announcement was that homeowners will no longer be able to leverage their homes up to 95%.  90% is the new maximum.  

The idea behind these new rules is to discourage the kinds of activities that led to the real estate meltdown in the States.  It sounds like common sense to me.  

Heather Belsito, Sales Representative, Royal LePage Real Estate Services Ltd., Brokerage

heatherbelsito.com