I love the changes....although I think more should be done to curb the spending habits of the average Canadian. It's too easy to get money these days.
As a former mortgage broker and now realtor, I am still trying to figure out why banks were only using 50% of condo fees in the calculation of GDS in mortgage applications. I hear that is now going to change as well, and 100% will be used. It's a good thing, because maint fees generally increase over the years, and they need to factor in at least some of that increase in expenses.
Limiting the HELOCs is also a great thing, although I love using HELOC's instead of a mortgage, as it gives 100% flexible payments. Better to have the full 20% down for that anyway.
The less easy the government makes household borrowing, the more stable our economy will be in the event of a financial hiccup felt across the world.

Michael

1. Amortization decreased from 35 years to 30 years

a. Monthly payments will increase
b. Maximum affordability will decrease
c. Interest over the life of the mortgage will decrease

***This means $35 for every $100,000. If a $100 is your tipping point you won't get a mortgage
2. Loan-to-value ratio on refinances has decreased from 90% to 85%
a. Consumers will have to wait until they have built up an additional 5% equity to refinance
b. Will hurt home owners who could have consolidated expensive credit card debt at loan-to-value ratios of 90%

****Average home owner in Toronto (at $430,000 average price) 5% means $21,500. The amount given for your average unsecured line of credit
3. HELOCs will no longer be insured by the Canadian government
a. "...very few financial institutions insure their HELOC portfolios. As such, the change is unlikely to register significantly on the aggregate lending scale." TD Bank

What kind of impact do you think the insurance changes on the HELOC will have? I have set up a couple of meetings with my finance professionals to discuss this - thoughts?

Roy said:
What kind of impact do you think the insurance changes on the HELOC will have? I have set up a couple of meetings with my finance professionals to discuss this - thoughts?

Some great facts from a TD Bank release: http://www.td.com/economics/comment/pg011711_CMHC_rules.pdf
The impact is not expected to be large. Our macroeconomic forecasts already embedded a significant slowdown in household debt accumulation and consumer durable spending.
The withdrawal of HELOC insurance may cause some substitution toward more traditional mortgages, but very
few financial institutions insure their HELOC portfolios. As such, the change is unlikely to register significantly
on the aggregate lending scale. Moreover, less than a fifth of refinancing deals are high loan-to-value (LTV
>80%), and lowering the LTV threshold to 85% likely impacts less than a tenth of refi loans through lower
amounts and/or alternative vehicles. All said, aside from some distortion on the timing of some heavily credit dependent activities, the policy changes do not alter our forecasts.

Thanks to Stephen Dostal, who said the following via Twitter:

Stephen Dostal said:
I think it will help people keep more equity in their homes instead of using that equity to buy a boat or car. That 10% change from the old 95% refinance is better for home owners.

Source: http://twitter.com/StephenDostal
And, thanks to Stephane Bruyere, who had the following to say via Twitter:

Stephane Bruyere said:
Maybe ok for 30 years but refinancing at 85% ltv will not stop costumers to spend.

Source: http://twitter.com/stephanebruyere

I had posted my analysis of today's mortgage changes in another post. Here is what I wrote:
Today, Finance minister Jim Flaherty announced the following:
1/ Effective March 18th, mortgage amortizations will be reduced from 35 years to 30 years
2/ Effective March 18th, homeowners can refinance their homes up to 85% of its market value from current 90%
3/ Effective April 18th, government will not longer insured home equity lines of credit
Here are the good news:
1/ Minimum downpayment requirement of 5% was not changed for buying a home
2/ Self employed homeowners refinance was not lowered from 85% (per last year changes)
3/ 100% of condo fees will not be used in mortgage qualification (currently 50% of condo fees are used)
4/ For real estate investors, there will be more rental demand due to the difficulty in qualifying for a mortgage
5/ Canadians will own their homes faster and pay less interest
The bad news:
1/ It will be difficult to qualify for a mortgage if you are a first time homebuyer due to the reduction of amortization to 30 years
2/ Homeowners with debt outside their mortgage who want to improve their cash flow situation will be limited to 85% of their home value
The result of the new rules is the creation of an active real estate market for the next 2 months. These changes will have minimal impact on real estate investors as 20% downpayment is the requirement and self employed homeowners who require 10% downpayment to purchase a home.
I have two concerns as we move forward with these changes:
What will happen to homeowners who bought their homes at zero down with 40 year amortization at renewal? Will they be forced to renew with current lenders at higher rates since they can't move their mortgage to another lender?
How will homeowners qualify for a mortgage when posted rates climb up to 7-8% as the global economy improves in the next few years?
Finally, we should be grateful that we live in Canada where the pendulum never swings too far one way or the other and we have escaped the great recession fairly well.

A lot of people who refinanced at 95% & 100% LTV are still in a weak position equity wise today. Having the new rules will help people make better choices with their Credit cards or lines of credit. This way u should know that your house can't bail you out when you over extend yourself credit wise. It will cut down on refinances a little but it will make people budget wiser!

Brian said:
1. Amortization decreased from 35 years to 30 years

a. Monthly payments will increase
b. Maximum affordability will decrease
c. Interest over the life of the mortgage will decrease

***This means $35 for every $100,000. If a $100 is your tipping point you won't get a mortgage

For a first time home buyer this could be a huge sore spot. If your a family struggling to make a $1800/month rent payment, but the only way to qualify for a mortgage on your first home is to shave that $100 off the mortgage payment for the bank to approve you its huge. Paying $1800/month maybe you can't afford to put any extra into your "downpayment savings account", but with a mortgage you'd be building your equity with each payment.

Nawar said:
I had posted my analysis of today's mortgage changes in another post. Here is what I wrote:
The result of the new rules is the creation of an active real estate market for the next 2 months.
Absolutely!

From the big picture perspective I think this is a good thing. I think too many people have taken on way too much debt and this needed to be reigned in. Those who want a bigger and better house but can't really afford it will have to save more to get it....and this isn't a bad thing.

Chris said:
From the big picture perspective I think this is a good thing. I think too many people have taken on way too much debt and this needed to be reigned in. Those who want a bigger and better house but can't really afford it will have to save more to get it....and this isn't a bad thing.

Should targeting reducing debt in an area that is generally known to grown in value really the way to go? How about making it harder to get credit on a credit card? Increase the number of visa/mastercard debit style cards that actually debit your account rather than creating more debt.
Spend $1000 on your visa and your purchase is sure to lose value the second it leaves the store. Buy a new car or perhaps a jet ski and again its worth less the second you take it off the lot. Buy a house/condo and watch your investment grow.
There is such a thing as good debt vs bad debt. Reducing debt that will lose value is key. Making it harder for people to take on debt that will actually increase their equity/debt ratio over time is @ss backwards.