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Downpayment Rules Are Changing in Canada

Minimum Downpayment rules are changing in Canada effective February 15, 2016

On February 15, 2016, the 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% of the purchase price.

 

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, 2016, to qualify under the 5% rule, and your purchase must also close before July 1, 2016.


For a free, quick pre-approval, call our trusted in-house Calgary Mortgage Broker Expert,

Cam Brown, at 403-650-5509

Data supplied by CREB®’s MLS® System. CREB® is the owner of the copyright in its MLS® System. The Listing data is deemed reliable but is not guaranteed accurate by CREB®.
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