The government has announced that as of July 9, 2012, new rules will apply to government-backed insured mortgages where the borrower has less than a 20% downpayment.

Here are the changes all effective July 9, 2012:

1. The longest amortization on a high ratio mortgage (greater than 80%) will be set now at 25 years, coming down from 30 years

2. High ratio refinancing has been lowered to 80% of the value of the property from 85%.

3. The maximum GDS (Gross Debt Service) available for qualified borrows has been reduced from 44% to 39%.

4. The maximum mortgage amount permitted high ratio is $1,000,000