Quick Links


Current Rates

Terms Our Rates
6 Months 3.10 %
1 Year 2.64 %
2 Years 2.54 %
3 Years 2.79 %
4 Years 2.94 %
5 Years 2.99 %
7 Years 3.69 %
10 Years 3.74 %
Current Prime 3.20 %
5 Year Variable 2.30 %

Industry Associations...

CAAMP IMBA

House over $500,000? New Downpayment Rules in February
2016-01-06

Your Home & Mortgage 

On February 15, 2016, minimum downpayment rules are changing in Canada – for homes worth more than $500,000. The change is straightforward: for any portion of the house price over $500,000, buyers will need to provide 10% downpayment for an insured mortgage. The minimum downpayment for the first $500,000 will remain unchanged at 5%.

How much difference could it make? Here’s a simple example:

Right now, you could get a mortgage for a $750,000 home with a downpayment of $37,500: a simple 5% of $750,000. Once the new rules kick in next month, you’ll need $50,000 downpayment for the same house: 5% for the first $500,000 ($25,000), plus 10% for the $250,000 over the limit (another $25,000).

The change was announced in mid-December by the new Liberal Finance Minister, Bill Morneau. While most Canadian homebuyers will be unaffected, the move is designed to protect Canadian homeowners by ensuring a stronger equity footing in their homes.

If there’s a house purchase in your future, let’s talk. You will need a mortgage approval before February 15 to qualify under the 5% rule, and your purchase must also close before July 1, 2016.

Here is a handy chart that outlines the impact of the new minimum downpayment requirement

Purchase Price

New Downpayment
Requirement

Old Downpayment Requirement of 5%

Up to & including $500,000

No change.
5% - up to $25,000

up to $25,000

$600,000

5.8% - $35,000

$30,000

$700,000

6.4% - $45,000

$35,000

$800,000

6.9% - $55,000

$40,000

$900,000

7.2% - $65,000

$45,000

$999,999

7.5% - $75,000

$50,000


Source: Invis and Mortgage Intelligence


Bookmark and Share