Down Payment Requirement Change!

Finance Minister Bill Morneau announced in a press conference on a recent Friday morning that the Canadian government is making changes to the minimum downpayment in order to “encourage stability in the Canadian housing market.”

The federal government has  announced that they will be making changes to the minimum downpayment, effective February 15th, 2016. These changes apply to insured mortgages on properties between $500k and $1M. The new minimum downpayment for insured mortgages is 5% for the first $500k and 10% on the portion of the price above $500k.

So for example, a property worth $700k would be 5% x $500k or $25k plus 10% x $200k or $20k for a total downpayment of $45k. Which is a $10k increase from the previous rules. The new downpayment rules apply to new home buyers and do not impact existing mortgage holders.