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

  • Coal on the rise in China, U.S., India after major 2016 drop

    Economic CTV News
    BEIJING -- The world's biggest coal users -- China, the United States and India -- have boosted coal mining in 2017, in an abrupt departure from last year's record global decline for the heavily polluting fuel and a setback to efforts to rein in climate change emissions. Source
  • Ontario needs innovative skills and apprenticeship training:study

    Economic CTV News
    TORONTO - A new study concludes that Ontario needs to get far more creative in order to properly prepare young people for jobs of the future. The study was commissioned by the Ontario Skilled Trades Alliance which represents companies that employ more than 400,000 skilled trades people across the province. Source
  • Air Miles raises cap on in-store redemptions effective Monday

    Economic CTV News
    TORONTO - Air Miles is raising some of the recent daily limits imposed on redeeming points for in-store purchases from retailers. The customer loyalty program sent notices during the weekend that says the new daily limit on Air Miles Cash redemptions, in most cases, has been raised to $100. Source
  • Portugal airline chief fears increasing drone near-misses

    Economic CTV News
    LISBON, Portugal -- Portugal's national airline chief said Monday he is considering asking authorities to order that all drones in the country be grounded, following a series of near-misses with commercial aircraft. If drones "keep entering airspace, we're going to call for them to be grounded," TAP Air Portugal President Fernando Pinto said. Source
  • Garbage piles mount in Greek capital as heatwave looms

    Economic CTV News
    ATHENS, Greece -- With a heat wave expected later this week, Greece's government on Monday failed to persuade striking garbage collectors to return to work after a 10-day protest left huge piles of trash around Athens. Source
  • Advice for retirees who must answer the question: Buy, sell or rent?

    Economic CTV News
    It wasn't that long ago when the outlook for retirees focused on baby boomers downsizing and moving into smaller homes in the country -- trading an urban lifestyle with a relaxing, rural retirement. Fast forward 20 years, and many retirees are opting to stay in their homes for longer: renovating, upgrading and improving accessibility along the way. Source
  • Shkreli defies advice to keep quiet before fraud trial

    Economic CTV News
    NEW YORK -- "Pharma Bro" just won’t keep his mouth shut. Even with his federal securities fraud trial set to begin Monday, Martin Shkreli has blatantly defied his attorneys’ advice to lay low. The former pharmaceutical CEO, who became a pariah after raising the cost of a life-saving drug 5,000 per cent, has been preening for cameras and trolling on social media, potentially complicating his defence. Source
  • 'Pharma Bro' defies advice to keep quiet before fraud trial

    Economic CTV News
    NEW YORK -- "Pharma Bro" just won't keep his mouth shut. Even with his federal securities fraud trial set to begin Monday, Martin Shkreli has blatantly defied his attorneys' advice to lay low. The former pharmaceutical CEO, who became a pariah after raising the cost of a life-saving drug 5,000 per cent, has been preening for cameras and trolling on social media, potentially complicating his defence. Source
  • Asian markets higher after Wall Street rebound

    Economic CTV News
    BEIJING - Asian markets rose Monday after Wall Street rebounded from losses to end the week higher on stronger oil and natural gas prices. KEEPING SCORE: The Shanghai Composite Index rose 0.5 per cent to 3,174.73 and Hong Kong's Hang Seng gained 0.5 per cent to 25,809.12. Source
  • German economic strength gives European markets a lift

    Economic CTV News
    LONDON -- Stock markets around the world have started the new week strongly with sentiment in Europe buoyed further by a strong German economic survey that reinforced hopes that the region's recovery is gaining momentum. Source