New Mortgage Rules for First time Buyers

New mortgage rules are about to hit first-time buyers in hot housing markets

 

WATCH: Inside Canada's new mortgage rules coming into effect on Feb. 15.

“The increase will raise the bar to homeownership quite materially in Vancouver and Toronto,” housing experts at RBC Economics say. “Especially for first-time buyers.”

 

Announced in December by Finance Minister Bill Morneau, the minimum amount a buyer will have to put down on a home worth half a million dollars or more will increase from 5 per cent of the price to a blended, higher rate: 5 per cent down on the first $500,000, and 10 per cent down on any dollar value above that amount.

Let’s use the example of a $700,000 home. Under the (soon to be old) 5-per-cent rule, a buyer would need $35,000 down to qualify for an insured mortgage loan.

On Feb. 15, the new minimum on that same home will jump to $45,000 or an additional $10,000.

 

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