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Here’s the latest on the “end” of government-backed 40-year amortizations and 100% financing:

• Borrowers with only 5% down will reportedly still be able to add insurance premiums to their mortgages. 
• Cash back mortgages are still expected to be available from certain lenders.  This may allow for the possibility of 100% financing, albeit in a far more expensive manner.
• High-ratio interest-only mortgages and lines of credit will no longer be insurable and will likely dwindle from their current small numbers.
• Canada’s 2nd biggest mortgage insurer, Genworth, has made it official that it will follow with the federal governments new amortization and financing limits.  
• Insurers AIG and PMI might not bow to the pressure.  There are news articles confirming they may be hatching a plan to keep 40-year amortizations and 100% financing alive.  The National Post reports it may involve a 95% insured 1st mortgage and an additional 5% non-insured securitized portion.
• PMI Canada, is meeting with the Department of Finance at the end of this month to discuss some possibilities.
• TD is the latest lender to immediately kill 40-year ams and 100% financing.

I have to admit I was completely surprised when the banks so quickly adopted the governments stance on the changes.  This will effectively take those banks out of the market that I believe will see an increase between now and October due to buyers rushing to buy homes prior to the changes taking hold.  This is great news for mortgage brokers as they will enjoy market dominance as the only conduit to these products that will be in demand.

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