New Canadian Mortgage Rules Announced 16.02.2016
On February 16, 2016, new mortgage rules took effect in Canada. So what does this mean for new buyers, sellers and the industry as a whole?
For Buyers: Bigger Downpayments
For the first $500,000 of the cost of the home, the downpayment is still 5%. Any amount beyond the first $500,000 will require a 10% downpayment. This means that for every additional $100,000 beyond the first $500,000, you need to have $10,000 in downpayment costs.
Example: Buying an $800,000 Home
$500,000 x .05% = $25,000
$300,000 x .10% = $30,000
Total downpayment required: $25,000 + $30,000 = $55,000
For the Sellers: Fewer Buyers Able to Afford Homes in Toronto
If your home is over $500,000, you may have less buyers knocking at your door - literally. First time home buyers will have a harder time saving for a bigger downpayment.
For the Real Estate Market in Toronto: Price Adjustments?
The purpose behind the downpayment hike is to slow down the red hot Toronto and Vancouver markets. Will it succeed? We'll just have to wait and see....
What do YOU think? Will this cool down the Toronto real estate market? How do the new rules affect you?