As of today new mortgage rules kick in. As a reminderThe 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 the $500,000 will be unaffected
How we feel this will effect the housing market:
- 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
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