As you may have heard, the Federal Government announced another batch of new rules surrounding mortgage borrowing in Canada, which will take effect March 18, 2011. Canadian Finance Minister Jim Flaherty announced steps to tighten record household borrowing amid concern rising debt levels could threaten the economic recovery. Policymakers including Mr. Flaherty and Bank of Canada Governor Mark Carney have been urging households in recent months to be wary of taking on too much debt after data showed the indebtedness of Canadians surpassed U.S. levels for the first time in 12 years. Canada will shorten the maximum amortization period for government-insured mortgages to 30 years from 35 years,...

When it comes to financial priorities, most Canadians say that becoming 'debt-free' is at the top of their list - but in the last year, almost half believe they didn't come any closer to achieving that goal. According to a poll of 1,000 Canadians by Manulife Bank of Canada, most Canadians didn't take advantage of the low interest rates to make an extra mortgage payment. About 29% said their debt increased in the past year, and another 17% saw no change in their debt levels. If you fall into the above group, here are some tips for devising a debt management plan: 1. Figure out how much debt you...

The new rules, set to take effect on April 19, 2010, aren't going to be as intrusive as many experts previously predicted, but they will work to prevent Canadians from overextending themselves. While Flaherty stands by the belief that a housing collapse is not yet imminent in Canada, he does admit that the country’s hot housing markets needed to be treated proactively. With these new rules in place, he believes Canadians will be better prepared for an influx in interest rates, able to foster equity growth in their homes, and opt to stay away from "reckless real estate speculation that has been known to drive housing prices to...

Recently, the Bank of Canada announced that the prime lending rate would not be changed, although, they hinted at an increase in July. It’s not like the government would ever lie, right?   Change or no change, I have to stress: get a mortgage pre-approval if you are thinking of buying a home in the future.   I will start by giving you a brief explanation on how the prime lending rate affects the housing market. There is a common misconception that the prime rate is tied to mortgage rates. This is entirely incorrect. The prime rate can indirectly impact mortgage rates, but they are not tied together....