[Mike Oxlong]

In an effort to crack down on speculators and discourage Canadians from taking on too much debt, Finance minister Jim Flaherty announced some changes to the mortgage lending guidelines today.

There had been some speculation in previous weeks that changes were coming to try and prevent a housing bubble in the Canadian housing market.

However, the changes announced today were not as drastic as expected. There had been talk of increasing the minimum down payment requirements from 5% to 10%, and also reducing the maximum amortization on a mortgage to 25 years down from 35 years. None of those changes were a part of today's announcement.

Here are the 3 main changes in today's announcement:

1. When applying for a variable rate mortgage, you will now have to qualify based on the current 5 year fixed rate. Previously you were required to qualify based on the 3 year fixed rate.

2. People looking to refinance their mortgage will only be able to refinance up to 90% of the value of their home rather than 95%.

3. When purchasing an investment property you will now require a 20% down payment. This is the most significant change as up to this point you were able to qualify for rental properties with only 5% down.

These changes are expected to come into effect on April 19, 2010.

http://money.ca.msn.com/investing/ne...entid=23466177