Changes to Canada's Mortgage Market

Changes to Canada's Mortgage Market


Quite recently the federal government announced additional changes to the down payment required when financing the purchase of a home. Starting in February next year, Canada Mortgage and Housing Corporation (CMHC) will require a 10% down payment on the portion of the sales price over $500,000. The 5% down payment requirement remains for purchases below $500,000 and homes valued at over $1,000,000 dollars still require a minimum down payment of 20%. So if you are buying a property below $500,000 or over $1,000,000 there’s no change to the required down payment.

So why change? According to a quote by our new Finance Minister Bill Morneau, “We recognize that, specifically in the Toronto and Vancouver markets, we have seen house prices that have been elevated and we want to make sure that we create an environment that protects the people buying homes so they have sufficient equity in their home.”

On another note, the US Federal Reserve raised interest rates for the first time in nine years by 25 basis points to a range of 0.25% – 0.50% ending a historic era of nearly 0% interest rates. The Fed’s era of record-low rates was aimed at driving an economic recovery following the worst recession since the Great Depression.

Buying real estate is one of the best long term investments anyone can make. It is crucial to understand all the options and opportunities when it comes to your needs and how any changes can affect you. 

I’m here to help people to grow their independent wealth and make informed decisions in regards to their current and future needs. Contact me today.





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