Attention Buyers: Huge new mortgage rules in 2016

On friday Finance Minister Bill Morneau announced huge changes to to any mortgages that are backed by CMHC. Here is a breakdown of the new rules:

  • The new regulations will increase the minimum down payment required to buy a home over $500,000
  • Portions beyond $500,000 will require a 10% down payment. For example: a home costing $700,000 will require a $45,000 down payment (5% on the first $500,000) and a 10% downpayment on the remaining $200,000 ($45,000 + $20,000 = $65,000 downpayment on a $700,000 home)
  • The minimum downpayment for homes over 1 million is still 20%
  • The regulations will come into effect February 15th, 2015
  • Buyers shopping for homes below $500,000 will be unaffected 

Our predections on how the rules will affect buyers:

  • The regulations are intended to dissuade borrowers from making riskier purchases and invest in less expensive homes so many buyers, especially first time homebuyers may look into smaller homes and/or condos
  • There will be a larger shift towards less expensive townhouse condos 
  • The market for two bedroom and family size condos will increase
  • January and February will be busier than normal as more buyers may rush to purchase before the new rules are implemented but the market will remain strong once the dust settles. 

If you have any questions or are looking to start your house search before the February 15th deadline contact us anytime at