NEW MORTGAGE GUIDLEINES

The Canadian government announced new guidelines for qualifying for mortgages as well as down payment requirements, in an effort to make Canadians borrow 'prudently' and be able to manage their debt load.

Borrowers must now qualify at the five year fixed rate mortgage, although they may choose whatever term they would like for their mortgage, once they qualify.

Borrowers refinancing the mortgage on their principle residence can now only borrow up to 85% of their home's equity, down from the previous 90%.

Down payment for non-owner-occupied properties will increase to 20%, up from the present 5% down. Borrowers who are purchasing owner occupied properties, will still be able to buy with 5% down.

These guidelines will come into force on March 18, 2011.