Government no longer to guarentee 40 year mortgages

July 10, 2008 | Market Update | By Aaron Rossetti

In a move to avoid a housing and credit crisis, the federal government will no loner guarantee 40-year amortization or zero-down mortgages. Government-backed mortgages will now require "a minimum down payment of 5%, will be limited to a maximum amortization of 35 years, and will need to meet a specific credit score."

This move will likely add further downward pressure to an already cooling market as many first time buyers will be limited in their financing options. In a report by The Vancouver Sun, a senior mortgage consultant with Invis estimated "that 85 to 90 percent of his first-time buyers have chosen the 40-year option."

To read more about the recent announcement, click here.