Today Finance Minister Bill Morneau announced changes to down payment requirements. Effective February 15, 2016, the minimum down payment for new insured mortgages 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.

Mortgage Professionals Canada Chief Economist, Will Dunning, is reviewing the full impact of this down payment increase – in particular, on first-time buyers. We will provide further analysis as it becomes available.

In our Fall Report, 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 homebuyers 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.”

We note that the 10% requirement does represent a graduated approach. We are disappointed, however, that this decision was taken without any formal industry consultation.


Click here for the government’s official news release.


Important News for Mortgage Shoppers

The Federal government announced on Friday that the minimum down payment for homes priced over $500,000 will increase. Currently, the minimum down payment for a home is 5% of the purchase  price. Effective February 15, 2016, the down payment will increase to 10% on the portion of the purchase price between $500,000 and $1 million. For example, a home costing $700,000 would require a $45,000 down payment – a 5% down payment on the first $500,000, added to a 10% down payment on the remaining $200,000.

Please see the below table that outlines the change in detail. Buyers shopping for homes below the $500,000 mark will be unaffected by the new rules.


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Alejandro Azuero 

Phone: 647 402  3660  –  1 877  758  1142

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