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Mortgage Insurance Changes

Mortgage Insurance Changes

Mortgage Insurance Changes

The Government of Canada released a press release this morning announcing “changes to the rules for government-backed mortgage insurance to contain risks in the housing market and reduce taxpayer exposire and support long-term stability”. (Department of Finance)

Beginning February 15, 2016 the minimum down payment for new insured mortgages will be 10% on the portion of the price of a home exceeding $500,000. Previously, the downpayment on this portion of the cost of a home was 5%.

This update will only affect mortgages obtained February 15, 2016 and onward. It is an effort by the Government of Canada to require a more proporionate down payment compared to the cost of a home.

For example: a $750,000 home would require:

5%   down payment on $500,000                      $25,000
10% down payment on $250,000                       $25,000
Total Down Payment on Purchase Price:            $50,000

Learn more about the upcoming changes on the Department of Canada website.