January 12, 2016 - As of February 15, 2016, residential buyers who wish to get hypothecary insurance will be subject to a new rule in Canada, namely a larger minimum down payment for any purchase exceeding $ 500,000.
Up to half a million dollars, the minimum down payment will remain the same, being 5% of the purchase price of a property. Beyond this amount, additional amounts must be supported by a down payment of at least 10% of the purchase price.
For example, to purchase a property selling for $ 700,000, the purchaser shall pay the following down payment: 5% for the first portion of $ 500,000, being $ 25,000, and 10% for the other portion $ 200,000, being $ 20,000.
The Canadian Minister of Finance, Bill Morneau, wants to prevent some buyers from “taking advantage of low hypothecary rates to make risky purchases, particularly in Canadian cities such as Toronto and Vancouver, where prices are high, “says Radio Canada.
"The measures taken today enable us to act cautiously with to emerging vulnerabilities in the housing market in certain regions of the country, without impeding the activity in other regions," said Bill Morneau. Please take note that Canadians who have already contracted a hypothecary loan are not affected by this measure.
Montreal, January 12, 2016
Source: CBC
