The Canadian government released more details today about the implementation further mortgage changes across the country.
The mortgages changes are going to affect those Canadians making purchases over $500,000, and they will go into affect on February 15, 2016.
“The new regulations will increase the minimum down payment required to buy a home for more than $500,000, with portions beyond that amount requiring a 10% down payment. The down payment on the first $500,000 will remain at 5%.
“For example, a home costing $700,000 would require a $45,000 down payment – 5% on the first $500,000, added to 10% on the remaining $200,000.” (Source – CTVNews.ca)
According to Finance Minister Bill Morneau, “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.”
“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,” Morneau said in the release. “They also rebalance government support for the housing sector to promote long-term stability and balanced economic growth.”
Properties in excess of $1 million will still require 20$ down.
The mortgage changes are meant to reduce taxpayer exposure while supporting long-term stability of the housing market, according to the ministry.
This round of mortgage changes could significantly affect homebuyers, especially those just entering the market as first time homebuyers, in markets where house prices are strong and still gaining. Even in Calgary, where we’ve seen dips in house prices, homes under $500,000 are not plentiful.
Contact me at 403-804-7002 if you want to know more about how this next round of mortgage changes will affect you.
