In case you missed the BIG news today – Finance Minister Bill Morneau announced major changes to CMHC insured mortgages.
Here is what you need to know about new mortgage rules
- Effective February 15, 2016 the minimum down payment on homes for over $500k will increase from to 10%. Currently rules only require a minimum of 5% down for properties under $1 million.
- The increase only applies to the portion of the property over $500k. In other words if you are buying a house for $900k you will have to pay 5% downpayment on first $500k and 10% on the remaining $400k. This works out to the total of approximately 7.2% total minimum downpayment.
- There are no changes for properties under $500k. You will still require a minimum 5% downpayment to qualify.
- There are no changes for properties over $1 million. You’ll need to come up with minimum of 20% down.
- New rules will only apply to newly issued mortgages. Don’t worry if you are renewing anytime soon.
What’s going on with Toronto Real Estate Prices
- Average sale price in Greater Toronto Area in November 2015 was $632,685
- Average sale price in Toronto in November 2015 was $654,221
- Condos averaged at $415,316
- Semi-detached homes averaged at $750,608
- Detached houses average price was $1,018,621
What’s in it for you
- If you are looking to purchase a home for over $500k with minimum possible downpayment than you better hurry and secure your mortgage before February 15, 2016.
- Real estate market in the GTA is promising to be unusually busy and competitive before rules come into effect as homebuyers who were holding off the purchase will be rushing to buy.
- Great news for owners of homes over $500k. Good time to list it for sale. Nothing can be better than a competitive buyers market.
There are over 1,700 homes for sale in Toronto which you can buy now with less money down than after February 15, 2016.
Questions? Looking to get into the game before the rush starts? Let us know.
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