The federal government is tightening mortgage rules, which are clearly aimed at slowing down the Toronto and Vancouver housing markets.
As of Feb. 15, there will be additional down payment requirements for homes that sell for between $500,000 and $1 million. The current 5% minimum down payment for the first $500,000 of the house price will be maintained, while requiring a 10% minimum down payment for the portion of the house price in excess of $500,000.
For example, someone buying a $700,000 property would be required to make a down payment of 5% on the first $500,000 ($25,000) and 10% on the remaining $200,000 ($20,000). That would equal a total minimum down payment of $45,000, or 6.4% per cent of the total purchase price.
The 5% minimum down payment for properties up to $500,000 remains unchanged and Canadians who already have a mortgage won’t be affected.