Finance minister announces down payment rule changes

Finance minister announces down payment rule changes

Finance minister announces down payment rule changes New down payment rules will go into effective February 15, 2016.

“The Government’s role in housing is to set and maintain a framework that is equitable, stable and sustainable. The actions taken today prudently address emerging vulnerabilities in certain housing markets, while not overburdening other regions,” Finance Minister Bill Morneau said in a release. “They also rebalance government support for the housing sector to promote long-term stability and balanced economic growth.”

The minimum down payment for new insured mortgages will increase from 5% to 10% for the portion of the house price above $500,000, the finance ministry wrote.

For example: A $750,000 home will now require $50,000 down -- 5% for the first $500,000 and 10% down for the remaining $250,000.

Properties up to $500,000 will continue to require a minumum of 5% down. Properties in excess of $1 million will still require 20% down.

The changes are meant to reduce taxpayer exposure while supporting long-term stability of the housing market, according to the ministry.

“This measure will increase homeowner equity, which plays a key role in maintaining a stable and secure housing market and economy over the long term,” Morneau said. “It also protects all homeowners, including many middle class Canadians whose greatest investment is in their homes.”
 
 
29 Comments
  • Jesse D 2015-12-11 10:16:19 AM
    They seriously need to cease their focus on the mortgage side and put some focus on the credit card companies that are charging high rates and constantly increasing limits.
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  • donna 2015-12-11 10:23:36 AM
    More balanced then I thought it would be. I believe the aging population is the cause of this. How many will be downsizing in the next 10 years? How many of higher priced homes will be on market at that time? I am being more specific for where my region is. I am not in Toronto or Vancouver.
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  • Sean Binkley 2015-12-11 10:35:58 AM
    Not exactly a big impact given that it means an additional $25k under new rules vs old on a purchase of $999k. Should be interesting to see if lenders implement the rules earlier than the actual effective date. Will the client also get a discount on the insurance premium (ie blended rate) or will they just charge the same and have lower risk now?
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