Government Changes Down Payment Rules

Well, 2015 was an exciting year. We had a change of power in Canadian Parliament, we overcame crisis and managed to get to 2016 without detrimental harm. Moving into 2016 with a Liberal government in power, we have already started to feel some of the effects of Trudeau and the changing of national powers. For instance, we are changing the rules for minimum down payment. This was breaking news in 2015, but now that we are at the enforcement stage of the change it seemed to go amiss by some people last year. Here’s a breakdown of what’s to come in the mortgage industry for 2016:

Minimum down payments on homes above 500k value has increased, you used to be able to qualify as a first time home buyer and put down 5% no matter what the value of your first home. Now, the more expensive the home, the larger the down payment required will be. Meaning, 5% down will be required on the first $500,000, and 10% down will be required on the next $500,000.

What’s the magical date this all take effect you may ask? Canadian Government says borrowers who get approved before February 15, 2016, can still buy with only 5% down. But lenders will likely set their application submission deadlines 1-2 weeks earlier. We will be keeping up to date with which lenders make cut off dates early. Will keep you posted!

Graeme.








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