Ottawa announces new minimum down payments for homes over $500K

The federal government is increasing the minimum down payment required to buy a home for more than $500,000 in an effort to cool the red-hot housing markets in Toronto and Vancouver.

See Full Article

Finance Minister Bill Morneau made the announcement in Ottawa on Friday.

"We are looking at ways to ensure our market is stable and we want to make sure people are making the appropriate decision as they buy a new home," Morneau said during a news conference.

The new regulations will increase the minimum down payment from five to 10 per cent on the portion of the home's price that's greater than $500,000.

The minimum down payment on the first $500,000 of the home's price will remain at five per cent.

Morneau said the changes will impact one per cent or less of the housing market.

CTV News first learned of the tightening of mortgage rules on Thursday.

Canadians who already hold mortgages will not be affected by the new rules, Morneau said.

The new regulations will come into effect on Feb. 15, 2016.

Under the new rules, a $700,000 home would require a minimum down payment of $45,000. The $45,000 would consist of a five per cent down payment on the first $500,000 of the home, added to a 10 per cent down payment on the remaining $200,000 of the home.

Under the old mortgage rules, that same $700,000 would require a minimum down payment of $35,000.

Morneau said the new mortgage rules specifically target the Toronto and Vancouver's housing markets, where "prices have been elevated."

"We want to make sure we create an environment that protects the people that are buying homes so they have sufficient equity in their home," he said.



Advertisements

Latest Economic News

  • Consumer culture on the rise in North Korea

    Economic CTV News
    PYONGYANG, Korea, Democratic People's Republic Of - Like all North Korean adults, Song Un Pyol wears the faces of leader Kim Jong Un's father and grandfather pinned neatly to her left lapel, above her heart. Source
  • Asian stocks slide as Spain attack weighs down markets

    Economic CTV News
    HONG KONG - Asian stocks sank Friday as global investor sentiment was battered by big losses on Wall Street amid U.S. political turmoil and a deadly van attack in Spain. KEEPING SCORE: Japan's benchmark Nikkei 225 index lost 1 per cent to 19,505.23 and South Korea's Kospi shed 0.2 per cent to 2,356.58. Source
  • Starbucks chairman questions 'moral fiber' of U.S.

    Economic CTV News
    SEATTLE -- Starbucks chairman Howard Schultz says the events surrounding a white nationalist rally in Charlottesville, Virginia, last weekend have put the "moral fiber" of the country in question. Schultz said at an employee forum in Seattle on Tuesday that he has "profound concern about the lack of character, morality, humanity," displayed at the rally, according to a recap of the meeting posted on Starbucks' website. Source
  • Ex-J.C. Penney executive tapped for CFO gig at Hudson's Bay Company

    Economic CTV News
    TORONTO -- Hudson's Bay Company has tapped the former chief financial officer of another struggling retailer, J.C. Penney, to fill its vacancy. Edward Record will step into the executive role on Aug. 28, taking over the job from Paul Beesley, whose upcoming departure was announced in early July. Source
  • Apple CEO makes $2 million pledge to fight hate

    Economic CTV News
    SAN FRANCISCO -- Apple is donating $2 million to two human rights groups as part of CEO Tim Cook's pledge to help lead the fight against the hate that fueled the violence in Virginia during a white-nationalist rally last weekend. Source
  • Walmart took bigger bite out of Canadian grocery industry last quarter, earnings show

    Economic CBC News
    Walmart says its Canadian stores gained market share against rivals during its fiscal second quarter. "We further improved our price position against competitors, which contributed to market share gains in key traffic driving categories such as food and consumables," Walmart chief financial officer Brett Biggs said in remarks prepared for analysts during a conference call to discuss its most recent results Thursday. Source
  • Minnesota to review Enbridge Line 3 oil pipeline from Alberta

    Economic CTV News
    MINNEAPOLIS -- Minnesota regulators on Thursday released the final environmental review of Enbridge Energy's proposal to replace its aging Line 3 oil pipeline, which carries Canadian tar sands crude across northern Minnesota to Wisconsin. The state Commerce Department has updated and expanded the massive document since it released the draft for public comment in May. Source
  • Ontario court dismisses CUPE lawsuit over sale of Hydro One shares

    Economic CTV News
    TORONTO - An Ontario court has thrown out a lawsuit against the provincial government over the controversial partial sale of Hydro One. The lawsuit filed last December by the Canadian Union of Public Employees alleged the sale of shares in the utility was "motivated by improper and ulterior purposes," namely to reward benefactors of the Ontario Liberal Party. Source
  • L.L. Bean boosts production of iconic boot

    Economic CTV News
    LEWISTON, Maine -- L.L. Bean hopes to give the boot to backlogs of its most iconic product. The Maine-based retailer is expanding production to keep up with demand for its leather-and-rubber "duck boot" with a new manufacturing centre with another machine used to make the rubber soles. Source
  • Canadian manufacturing sales fall 1.8 per cent in June, breaking winning streak

    Economic CTV News
    OTTAWA -- Canadian manufacturing sales fell in June following three consecutive months of gains, with declines led by the petroleum and coal industry. Manufacturing sales slipped 1.8 per cent overall to $53.9 billion in June, Statistics Canada said Thursday in a monthly report. Source