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Friday, October 28th, 2016

Changes To Down Payment Requirements Coming February 15, 2016 –

Changes To Down Payment Requirements Coming February 15, 2016

1406C8C8-7BA1-4560-84C3-F3C0736B8228On Friday, Finance Minister Bill Morneau announced changes to down payment requirements. Effective February 15, 2016, the minimum down payment for new insured mortgajges will increase from five per cent to 10 per cent for the portion of the house price above $500,000. The five per cent minimum down payment for properties up to $500,000 remains unchanged.

Homes priced at more than $1 million by law require a minimum down payment of 20 per cent. This announcement therefore focuses on homes priced between $500,000 and $1 million.

In the Mortgage Professionals Canada (MPC) Fall Report, Chief Economist, Will Dunning discusses why raising the down payment could cause problems for the housing market, including this cautionary observation: “Rising prices have made it increasingly difficult for first-time home buyers to accumulate down payments. Increasing down payment requirements would, most likely, severely dampen housing demands from people who are financially well-qualified to make their monthly mortgage payments.”

MPC notes that the 10% requirement does represent a graduated approach while the Ministry of Finance commented that they believe this will only impact 1% of home purchasers.

Also, buyers will require greater savings in order to qualify for a mortgage. See the chart above, contact Dominion Lending Centres and checkout the short video below for more information:

RESIDENTIAL MORTGAGES

The purchase of a home is the largest purchase most people make during their lifetime. At Dominion Lending Centres, we want to make each and every purchaser aware of the many mortgage options available to them prior to their purchase and closing date.
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COMMERCIAL MORTGAGES

Dominion Lending Centres Commercial has established excellent relationships in the lending community with pension funds, banks, credit unions, life insurance companies, trust companies, private institutions and individual investors.
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EQUIPMENT LEASING

A Dominion Lending Centres leasing professional can help you in discovering multiple ways to structure lease financing for new equipment, a sale-lease back to extract capital from existing assets, or solve other equipment acquisition opportunities.
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