{"id":1830,"date":"2022-07-06T21:10:54","date_gmt":"2022-07-06T21:10:54","guid":{"rendered":"https:\/\/mymortgagepros.com\/?p=1830"},"modified":"2024-02-08T05:45:51","modified_gmt":"2024-02-08T05:45:51","slug":"heloc-changes-you-need-to-know","status":"publish","type":"post","link":"https:\/\/mymortgagepros.com\/heloc-changes-you-need-to-know\/","title":{"rendered":"HELOC changes you need to know!"},"content":{"rendered":"\n

Last week, Canada\u2019s banking regulator unveiled new rules governing how borrowers may use Home Equity Lines of Credit (HELOCs).<\/a>\u00a0<\/strong>\u00a0The new guidelines unveiled by the Office of the Superintendent of Financial Institutions (OSFI)<\/a><\/strong> will affect re-advanceable mortgages, specifically those where the outstanding balance is greater than a 65% loan-to-value (LTV).\u00a0<\/p>\n\n\n\n

 Re-advanceable mortgages are those with two or more portions to the loan, including an amortizing part and a revolving line of credit. OSFI refers to these products as \u201cCombined Loan Plans,\u201d or CLPs.<\/p>\n\n\n\n

 \u201cThe most significant concern with these products is the re-advance ability of credit above the 65% loan-to-value (LTV) limit,\u201d OSFI said in its release. <\/p>\n\n\n\n

 What\u2019s changing?<\/strong><\/h3>\n\n\n\n

 If you currently have a re-advanceable mortgage, when you repay any principal, that money can sometimes be re-borrowed from the line of credit portion of the loan.   <\/p>\n\n\n\n

\u00a0But when OSFI\u2019s new rules are fully implemented in 2023, any principal payments to your balance above the 65% LTV threshold will reduce the overall loan balance, and thus the re-advanceable borrowing limit until that limit reaches 65% LTV.<\/strong><\/p>\n\n\n\n

\u00a0The changes will also apply to reverse and residential mortgages with shared equity features.\u00a0OSFI said the new rules would have no impact on borrower payments.\u00a0<\/p>\n\n\n\n

 The new rules will take effect on October 31 or December 31<\/strong> for new borrowers, depending on the lender\u2019s fiscal year-end. For existing HELOC borrowers, the change will take effect on their renewal date if it occurs after the dates noted above.  <\/p>\n\n\n\n

 In terms of the impact of these changes, loan balances above the 65% LTV threshold currently account for $204 billion of the $1.8 trillion in outstanding residential mortgages, according to OSFI. In addition, according to Bank of Canada data, re-advanceable mortgages comprised $737 billion of the market as of Q1 2022.  <\/p>\n\n\n\n

 \u201cOur expectations include lenders ensuring that all combined lending product borrowing above a 65% loan-to-value (LTV) limit will be amortizing and non-re-advanceable,\u201d OSFI head Peter Routledge wrote in a piece for the Financial Post. \u201cIn so doing, we lessen the fragility produced when borrowers sustain high LTV ratios beyond contractual amortization periods.\u201d<\/p>\n\n\n\n

\u00a0If you currently have or are in the market for a re-advanceable mortgage and have questions about how these changes might affect your borrowing needs, please call me3-253-2022 today, and I\u2019ll be pleased to walk you through the new rules.\u00a0You can Also visit us for FREE CONSULTATION<\/a><\/strong> and professional opinion on your mortgage, even when you are just looking for expert advice. <\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Last week, Canada\u2019s banking regulator unveiled new rules governing how borrowers may use Home Equity Lines of Credit (HELOCs).\u00a0\u00a0The new guidelines unveiled by the Office of the Superintendent of Financial Institutions (OSFI) will affect re-advanceable … Read More<\/a><\/p>\n","protected":false},"author":3,"featured_media":609,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0},"categories":[137,74],"tags":[79,138,140,139],"yoast_head":"\nHELOC changes you need to know! - My Mortgage PRO - Calgary<\/title>\n<meta name=\"description\" content=\"Re advaneable HELOC mortgages have new rules set by OFSI will not able to use equity over 65% of the total mortgage loan. 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