As you have likely already heard on the news, earlier this morning the Finance Minister announced changes to the minimum down payment on houses valued over $500,000. Effective February 15th 2016, the minimum down payment for new insured mortgages will increase from 5 per cent to 10 per cent for the portion of the house price above $500,000 (NOT THE FULL PURCHASE PRICE). The move is an effort to curb the rising real estate prices in Toronto and Vancouver.  

For example, under the new rules, a buyer looking to purchase a home priced at $750,000 would need to have a minimum down payment of $50,000 which is calculated as follows: $25,000 (5% of $500,000) plus $25,000 (10% of $250,000). Prior to the rule change, the borrower could have purchased the same home with a total down payment of $37,500 (5% of $750,000). The new rule changes result in the purchaser having to put an additional $12,500 down on the property.

The change will NOT affect borrowers who have already entered into an agreement to purchase or build a home, or borrowers who enter an agreement before the February 15th 2016 deadline.


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Today’s Bank of Canada rate hold announcement marks almost four straight years that the key benchmark rate has remained unchanged, since September 8, 2010. Great news if you have a variable-rate mortgage or home equity line of credit; the prime rate stays at 3%.


The announcement noted that “the risks to the outlook for inflation remain roughly balanced, while the risks associated with household imbalances have not diminished.” With these considerations, the Bank is maintaining its monetary policy stimulus, and remains neutral with respect to the timing and direction of the next change.


The next rate-setting day is October 22nd.

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