Heloc LTVs going to 65%?

[bizaro86]

http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2012/05/heloc-loan-to-values.html



Raises some concerns for me, especially the part about existing 80% loan to value HELOCs not being grandfathered. It seems like they'd pretty much have to give people time to get their existing HELOCs down to 65%.



Any thoughts on how likely this change is to happen and how it would affect you/the real estate market in general?



Regards,



Michael

 

[Thomas Beyer]

Many rumors floating around these days. Since interest rates increases are bad for the economy all sorts of other tricks like "words" by the Prime Minister, the Finance Minister, various bank CEOs or CMHC are an attempt by authorities to reduce borrowing and excessive leverage. A LOC, unlike a mortgage, can always be cancelled by the lender at any time. I would prepare for it, and plan accordingly, as it will likely happen, but not overnight, and not by all lenders. Too many Canadians have too high a mortgage at too young an age, so reduced leverage is prudent policy.