No more zero-down and 40-year amortization mortgages

[trent]

The Canadian government created new rules for government guaranteed mortgages, making it harder to borrow. The government will no longer back 100% financing and will require a minimum of 5% downpayment government-backed mortgages. The maximum amortization period for new government-backed mortgages was lowerd from 40 to 35 years. The government has introduced new standard for loan documentation and it also requires a minimum credit scores for government-backed mortgages. The new rules will be in effect on Oct. 15, 2008.

Obviously the Canadian government is really scared of the future of Canadian real estate (read: "The coming Canadian real estate collapse") and they are trying to prevent it. Too little, too late as usual. The changes are not enough, and there is nothing that can stop the overpriced Canadian real estate from crashing down to earth.

[Canadian]

That's great news for me! I hope this will speed up the inevitable crash in the super-overpriced Canadian real estate. The next 2 years will be really bad for Canadian homeowners and a lot of "paper wealth" will disappear in smoke. It will be fun to watch...

[sunshine]

Do you think they can prevent the real estate collapse with those measures? (if there is going to be a collapse at all) The market is going flat, that’s all.

[invest]

Originally Posted by Canadian

That's great news for me! I hope this will speed up the inevitable crash in the super-overpriced Canadian real estate. The next 2 years will be really bad for Canadian homeowners and a lot of "paper wealth" will disappear in smoke. It will be fun to watch...

I don't think it will be "fun to watch". If the economy is in bad shape this will reflect on everybody: higher prices, high fuel prices, unemployment....