House over $500,000? New down payment rules in February.

On February 15, 2016, minimum down payment rules are changing in Canada – for homes worth more than $500,000. The change is straightforward: for any portion of the house price over $500,000, buyers will need to provide 10% down payment for an insured mortgage. The minimum down payment for the first $500,000 will remain unchanged at 5%. How much difference could it make?Here’s a simple example:
Right now, you could get a mortgage for a $750,000 home with a down payment of $37,500: a simple 5% of $750,000. Once the new rules kick in next month, you’ll need $50,000 down payment for the same house: 5% for the first $500,000 ($25,000), plus 10% for the $250,000 over the limit (another $25,000).
The change was announced in mid-December by the new Liberal Finance Minister, Bill Morneau. While most Canadian home buyers will be unaffected, the move is designed to protect Canadian homeowners by ensuring a stronger equity footing in their homes.
If there’s a house purchase in your future, can help. We have access to great rates, and we offer our client’s a no strings attached cash rebate for completing their mortgage application online. You will need a mortgage approval before February 15 to qualify under the 5% rule, and your purchase must also close before July 1, 2016. Check us out at

Here is a handy chart that outlines the impact of the New Minimum Down payment Requirement


Up to and including No charge.
$500,000 5% – up to $25,000 Up to $25,000
$600,000 5.8% – $35,000  $30,000
$700,000 6.4% – $45,000  $35,000
$800,000 6.9% – $55,000  $40,000
$900,000 7.2% – $65,000  $45,000
$999,999 7.5% – $75,000  $50,000

**Cash rebates are paid on funded deals on the 15th and last day of the month the deal

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