Canada’s new mortgage down payment rules took effect this week

by | Feb 17, 2016 | Mortgages

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The new down payment rules are in full effect.
When you purchase a home worth over $500,000, you must put 10% down on any additional amount above $500,000. If you’re buying a home at $500,000 or under, you’ll still pay just 5% for your down payment. Finally, on any home over $1,000,000, you’ll need to put down 20%.
This is a much better solution than the minimum 10% down payment up to $1,000,000 that was under consideration.
While this might sound like a significant change, fewer than 1 in 10 first-time homebuyers in Canada purchase a home valued above $500,000, and a significant number of those buyers put more than 5% down. You’ll probably be unaffected.
These changes target buyers in larger Canadian cities like Toronto and Vancouver. Our government appears to be trying to slow down the real estate market in larger cities and manage their risk regarding CMHC insured mortgages.
Canadian Real Estate Association confirmed that real estate prices across the country have risen 18% year over year. However, if we don’t include Vancouver and Toronto, the increase is at a more sustainable rate of 5.4%.
Lenders are gearing up for the spring market with competitive rates, and real estate inventory is beginning to grow in most markets. Whether you’re looking for your first home, your dream home, or an investment, now is the time to get a mortgage pre-approval and lock in your rate.
Contact us today to discuss how we can help you get into the home you want.