Top 5 New Developments for 2007

1) AIG Mortgage insurance products - For a long time, the mortgage insurance market had been dominated by CMHC and Genworth. With only two major players in the market, there wasn’t very much innovation and competition in the industry. AIG’s entry has been a catalyst for change in the industry. AIG brought in higher loan amounts, high-ratio mortgages for rental properties, 3% down payment mortgages and 5% down low down payment mortgages. Bridgewater Bank was the first lender to offer AIG insured products. AIG’s insurance is currently available mainly through non-bank lenders such as Firstnational, Firstline, AGF Trust

2) 40 year amortization - Given the high home prices in the Metro Vancouver area, the 40 year amortization mortgage is quickly becoming the standard amortization for mortgages.

3) 20% conventional mortgages - For many (not all) lenders, mortgages with 20% down payment/equity do not require mortgage default insurance anymore.

4) High-ratio investment property mortgages - Up until the Summer of 2007, investors needed at least 25% down payment to purchase an investment property. Now, it is possible to purchase an investment property with as little as 10% down payment. CMHC recently announced that they will insured investment properties without a downpayment. However, a lender has yet to announce that they will participate in CMHC’s zero down rental programme.

5) US Sub-Prime Meltdown - Canada’s subprime market has been hurt by the US Subprime problems. Lenders have tighted up, pulled back or increased their interest rates.