New mortgage rules go into effect nationwide Monday, but it seems many Canadians have no clue there has been a change.
Starting Monday, lenders are only able to to issue home equity loans up to a maximum of 80 per cent of the property’s value, down from the previous 85 per cent.
The maximum amortization period has also now dropped from 30 to 25 years, meaning borrowers have less time to fully repay their debt.
A poll, conducted by Pollara for Bank of Montreal, found only about half of those surveyed were aware of the new rules and regulations.
In addition, only 45 per cent of respondents knew the amortization period had been shortened.
Federal Finance Minister Jim Flaherty announced the changes on June 21.
The survey also stated the new rules are making prospective home buyers think twice about their purchase.
14 per cent said the changes make it less likely they will buy a new home in the next five years. And 41 per cent still planning to purchase said the new rules will make them more likely to spend less than they originally planned.
Nearly half (45 per cent) said they planned on taking out a smaller mortgage.
The poll was conducted from June 29 to July 4 with a random sample of 1,000 Canadians 18 years and older.