If you're planning to buy a home this fall, start saving up for that down payment.

 

The Federal Government is cancelling the 40-year guaranteed mortgages, offered to borrowers with zero down payment, effective from October 15. After October 15, the longest term mortgage that can be backed by the government is 35-years, and borrowers must put down at least a 5 per cent down payment. Many are saying this is a move to avert a possible mortgage crisis like the one affecting the US right now, but Earl Hansen, Associate Vice President of Relationship Banking with Innovation Credit Union, doesn't believe that will happen in Canada anytime soon.
Hansen says although the cancellation may shut out some potential home buyers, he projects a minimal impact in the local housing market once the new rules take effect. Hansen doesn't think Canada will be in a crisis situation, because of the numerous regulations on lending in this country.