Suzana Davies Sales Representative ®
RE/MAX Realtron Realty Inc., Brokerage*, Brokerage Independently owned and operated
Mobile: 416-843-7017

REAL ESTATE MORTGAGE UPDATE ~ TORONTO / GTA

Effective February, 2016 our new Liberal government will be applying the new rule and tightening lending ability for residential mortgages, setting a minimum down payment of 10% on the portion of home prices over $500,000.

Homebuyers are currently required to put down a minimum of 5% to qualify for Canada Mortgage and Housing Corporation insurance – a protection that lenders insist on when providing you with a mortgage worth more than 80% of the home’s value.

Back in December 2015, Finance Minister Bill Morneau said homes purchased below the new price ceiling will remain at five per cent.

The policy shift has been decided on, in an effort to limit Canadians’ exposure to financial risks should the housing market experience a correction.

Finance Minister Bill Morneau said,  “We believe that by increasing the down payment . . . we will create a better buffer for people and make people more secure, and have the entire market be more stable”. 

What does this mean exactly and how does it translate ?

Take a $750,000 home, for example, would now require a $50,000 down payment.

Example:

5% x  $500,000 = $25,000

10% x $250,000 = $25,000

Your down payment required is $50,000

The government has adjusted the mortgage rules four times since 2008 and these adjustments did show a temporary cooling effect, in Toronto, and especially in the last set of tighter rules placed in 2012.

Look at this new rule as a means of protection for YOU, the homebuyer and the housing market in general which has been the leader of our economic stability.

As always, please do not hesitate to call if you or a friend have some Real Estate needs, I am here to help!

 

Your friend in Real Estate. 

Suzana ( Sue ) Davies , Sales Representative Remax Realtron

suzdavies@trebnet.com 416-843-7017 www.suzanadavieshomeseek.com

Suzana Davies Sales Representative ®
RE/MAX Realtron Realty Inc., Brokerage*, Brokerage Independently owned and operated
Mobile: 416-843-7017

Trademarks owned or controlled by The Canadian Real Estate Association. Used under license.

The information provided herein must only be used by consumers that have a bona fide interest in the purchase, sale or lease of real estate and may not be used for any commercial purpose or any other purpose.

Information is deemed reliable but is not guaranteed accurate by TREB.

Toronto Real Estate Board - IDX Last Updated: 10/21/2017 3:04:21 PM