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Down payments increase for higher priced homes

Down payments increase for higher priced homes

Posted on: February 08, 2016
Author: Staff

Alert! There is a new rule for down payments in Canada, and if you’re in the market for a home that costs more than $500,000, the change affects you.

The federal government announced the policy change in December 2015. The policy will require a 10 per cent down payment on the portion of the home price that’s above $500,000. The new measure takes effect on February 15, 2016.

The minimum down payment on a property up to $500,000 remains at five per cent. If the home is more than $500,000, a buyer can still put five per cent down on the first $500,000.

This chart breaks down exactly what the change means:

Minimum Down Payment by Home Purchase Price: Existing and New Eligibility Rules

Why the change?

According to information on the Department of Finance’s website, the measure is an effort to “maintain a healthy, competitive and stable housing market.”

What if I already have an insured mortgage?

This will not affect you. It applies only to new insured mortgage loans.

What if I have already applied for mortgage insurance but my mortgage is not yet in place?

The new down payment requirements apply to insurance applications received between December 11, 2015 and February 14, 2016 where the closing date is after July 1, 2016.

If you have questions about the new rules, talk to us in a branch or call our Customer Care Centre at 1-800-332-8383.

You may also be interested in:

Down payment help
7 creative ways to come up with a down payment
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