5 things to know about new mortgage rules

TORONTO -- Homebuyers in Canada now face larger down payment requirements for properties over $500,000. The changes are intended to temper some of Canada's heated real estate markets.

See Full Article

Here are five things to know about the new rules:

Cough up the cash: Homebuyers now have to put at least a down payment of 10 per cent on the portion of the price of a home over $500,000. For anyone buying a home for $700,000 -- a common list price in Vancouver and Toronto -- that means the minimum down payment will rise to $45,000 from $35,000. Any home under $500,000 still requires only a down payment of five per cent.

Who's affected: Primarily those shopping for a home in Toronto and Vancouver. First-time buyers in those cities will feel the pinch since they'll be required to put down bigger down payments to get into the market. Those selling their homes in order to size up, especially in cities with hot housing markets, likely won't feel the pain since they've built up equity in those properties.

Impact: The influence the new rules will have over house prices is expected to be small, experts say, given their narrow reach. When he announced the changes in December, Finance Minister Bill Morneau said they are expected to affect one per cent or less of the real estate market.

Sales activity: Some analysts expected a surge in sales leading up to Monday's changes, saying they would lure homebuyers who wanted to avoid making the bigger down payments. Royal LePage CEO Phil Soper says sales activity has been "boisterous" in Ontario, B.C. and Quebec in the first five weeks of this year, but he credits a relatively mild winter and low mortgage rates.

Past measures: Four rounds of changes were made to tighten eligibility rules for new insurable loans between 2008 and 2012. Among them: the minimum down payment was increased to five per cent, the maximum amortization period was reduced to 25 years from 30 years and the maximum insurable house price was limited to below $1 million.



Advertisements

Latest Economic News

  • Volkswagen ordered to pay $2.1B in class-action suit over emissions scandal

    Economic CBC News
    Members of a Canadian class-action lawsuit against Volkswagen can submit claims for reimbursement starting on Friday after an Ontario court approved a $2.1-billion settlement plan. The 105,000 people who purchased or leased certain Volkswagen or Audi vehicles with two-litre diesel engines that were caught up in an emissions cheating scandal will each receive a payment between $5,100 and $8,000, wrote Superior Court Justice Edward Belobaba in his judgment Wednesday. Source
  • Bombardier rejects Boeing claim CSeries was dumped into the U.S. at below cost

    Economic CTV News
    MONTREAL -- Bombardier and the federal government have rejected Boeing's claim in a complaint filed with the U.S. government that its Canadian rival has dumped its new CSeries commercial jet into the United States at below cost. Source
  • Boeing seeks U.S. anti-dumping probe against Bombardier CSeries jet

    Economic CBC News
    Boeing Co. said on Thursday it had asked the U.S. Commerce Department for an investigation into alleged subsidies and unfair pricing for Canadian planemaker Bombardier's CSeries airplane. The request for anti-dumping measures was also addressed to the U.S. Source
  • Shaw Communications reports outage of internet, TV and phone services

    Economic CBC News
    Shaw Communications Inc. says customers were hit by an outage to its internet, television and home phone services on Thursday. Company support services said in a 1:20 p.m. PT posting on a website that technicians were working on the problem. Source
  • Shaw internet, TV and phone service outage fixed

    Economic CBC News
    Shaw Communications Inc. says customers were hit by an outage to its internet, television and home phone services on Thursday. Company support services said in a 1:20 p.m. PT posting on a website that technicians were working on the problem. Source
  • Canam stock nearly doubles on going-private offer for Quebec-based company

    Economic CTV News
    MONTREAL -- Canam Group is preparing to end its 33-year run as a public company after partnering with a U.S. company and Quebec investors to take the structural steel specialist private. After a few years of reflection, the leadership of the company founded in 1960 concluded that the constraints of being public not longer fit with its vision. Source
  • United Airlines reaches undisclosed settlement with passenger dragged from plane

    Economic CBC News
    A Kentucky doctor who was dragged off a United Airlines flight after he refused to give up his seat to crew members has reached a settlement with the airline for an undisclosed amount. David Dao's legal team announced the settlement Thursday in a brief statement. Source
  • Employers can pay women less based on past salaries, U.S. court rules

    Economic CTV News
    SAN FRANCISCO -- A federal appeals court says employers can legally pay women less than men for the same work based on differences in the employees' previous salaries. The decision by the 9th U.S. Source
  • BlackBerry smartphone with physical keyboard will be sold in Canada next month

    Economic CTV News
    TORONTO - Canadians will be able to buy a new BlackBerry-branded smartphone with a physical keyboard starting next month. The KEYone, a phone made in partnership between TCL Communication Technology Holdings Ltd. (TCT) and BlackBerry (TSX:BB), will be available for pre-order at some partners as of May 18. Source
  • Southwest Airlines to end practice of overbooking flights

    Economic CBC News
    Southwest Airlines says it plans to stop overbooking flights — an industry practice implicated in an ugly incident on a United Airlines flight that has damaged United's reputation with the flying public. Last year Southwest bumped 15,000 passengers off flights, more than any other U.S. Source