Canadian Finance Minister Bill Morneau has announced new down payment rules for mortgages issued after February 14, 2016, which are designed to cool the overly hot real estate markets in Toronto and Vancouver. Beginning on that date, properties costing between $500,000 and $1,000,000 will require a minimum down payment of $25,000 plus 10% of the portion of the purchase price above $500,000.

Properties costing less than $500,000 will continue to require a minimum down payment of 5%, and the rules for properties costing over $1,000,000 will not change – a down payment of 20% is still required.

Taking advantage of these low down payments may not be the best plan, however, because mortgage insurance is required any time a down payment is less than 20% of the purchase price – insurance which is relatively costly.

If you have questions about how these recent changes may affect you and your real estate plans, don’t hesitate to contact your Deakin Realty broker.