As of Feb. 15, 2016, mortgage downpayment rules are changing. This change has been announced to help slow or cool the housing markets in Canada, especially in Toronto and Vancouver, the hottest markets in the country.
What do these changes mean to the home buyer?
For all purchases under $500,000 – 5% down payments are minimum = $25,000
Any amounts of $501,000 and over – 10% additional down payment is required.
So on a $700,000 purchase the downpayment required would be $45,000 – $25,000 for the first $500,000 and $20,000 for the balance. This is 6.4% of the total purchase price.
This applies to all new mortgages that are applied for after the Feb. 16, 2016 deadline. If you apply before that date, the old rule does apply as long as the mortgage in activated by July 1, 2016.
This does not effect those with existing mortgage or those renewing existing insured mortgages.