New Down Payment Rules
Posted by Cheryl Blackey on
NEW DOWN PAYMENT RULES – FEBUARY 15, 2016
As many of you may be aware the minimum down payment rules for insured mortgages (generally less than 20% down) are changing as of February 15, 2016.
The changes will not affect most first time buyers in our area, as they only affect homes over $500,000. The current minimum down payment for a home up to $500,000 is still 5%. It will however put more pressure on down payments for the higher valued homes.
Where the change comes in to play is on the amount of the purchase price between $500,000 and $1,000,000. On that portion of the price the minimum down payment will be 10%. Any home purchases over $1,000,000 are not affected as they do not qualified for insured mortgages.
As an example an insured mortgage home purchased for $600,000 will now require a down payment of $35,000 (previously $30,000). A purchase of $750,000 would now require a down payment of $50,000 (previously $37,500).
This change is not expected to have a huge effect on our Cowichan Valley real estate market. It is a much better outcome than the rumoured 7-10% flat down payment on homes $500,000 to $1,000,000 that was expected.
So while this may not affect all our clients, we like to keep you in the know.