As of today December 11, 2015 the Finance Minister Bill Morneau announced that on February 15, 2016 that the minimum down payment for new insured mortgages will increase from 5% to 10% for the portion above $500,000.
So How Does This Work?
Let's say you purchase a property of $700,000 - when the new rules take affect you will pay 5% of the $500,000 ($25,000) plus 10% of the remaining $200,000 ($20,000) which gives you a total downpayment required of $45,000. This in turn reflects a change of $10,000 over the current rules.
Why Is The Government Making These Changes?
The move is aimed at cooling overheated housing markets in Toronto and Vancouver but that could risk exaggerating a home price correction in the Prairies. With the Finance minister stating:
So what are your thoughts on the recent changes? Do you think it will affect you or anyone you know?
Please feel free to contact me at any time about more details about the current changes and how they might affect you.