This past December, Finance Minister Bill Morneau announced changes to the rules for government-backed mortgage insurance. Effective February 15th, 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 minimum down payment will remain at 5% for homes with a purchase price of $500,000 or less.
“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. They also rebalance government support for the housing sector to promote long-term stability and balanced economic growth.”
“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. It also protects all homeowners, including many middle class Canadians whose greatest investment is in their homes.”
– Bill Morneau, Minister of Finance
Press Release from Department of Finance Canada:
http://www.fin.gc.ca/n15/15-088-eng.asp
Department of Finance Canada, Frequently Asked Questions:
http://www.fin.gc.ca/afc/faq/hdpmeh-mfperpc-eng.asp
Here is a chart to show how the changes will impact home buyers:
|
Purchase Price |
5% Min. |
Portion Above $500K |
10% on Portion Above $500K |
Total Down Payment |
Total as % of Purchase Price |
|
$400,000 |
$20,000 |
n/a |
n/a |
$20,000 |
5% |
|
$500,000 |
$25,000 |
n/a |
n/a |
$25,000 |
5% |
|
$600,000 |
$25,000 |
$100,000 |
$10,000 |
$35,000 |
5.83% |
|
$700,000 |
$25,000 |
$200,000 |
$20,000 |
$45,000 |
6.43% |
|
$800,000 |
$25,000 |
$300,000 |
$30,000 |
$55,000 |
6.88% |
|
$900,000 |
$25,000 |
$400,000 |
$40,000 |
$65,000 |
7.22% |
|
$1 million* |
n/a |
n/a |
n/a |
$200,000 |
20% |
*Properties valued at $1 million and above require a minimum down payment of 20%
If you are thinking of moving, Team Masterson can provide a free market evaluation of your existing home or can help you find your next ‘dream’ home. Just give us a call or send us an email.
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Scott Masterson 647.967.9327 scott@teammasterson.com
Susan Masterson 647.388.4471 susan@teammasterson.com