What you should know about the new down payment rules

Starting in February, the minimum down payment for new insured mortgages will increase from 5% to 10% for the portion of the house price above $500,000.  This rule will be effective February 15th 2016.

The two important upcoming dates to keep in mind are:

February 14, 2016 - Mortgage applications have to be submitted to CMHC by this date (not to the lender, but from the lender to CMHC).

July 01, 2016 - The purchase must complete prior to this date. If you do a mortgage application prior to February 14,2016, but the completion date is July 02, 2016, then these new rules apply to the deal.

In summary, to what type of loans does the new minimum equity requirement apply? The new minimum equity requirement applies to all purchase homeowner loans where the purchase price of the property is greater than $500,000, but less than $1,000,000.

How was the minimum equity requirement changed with the December 11, 2015 announcement? The minimum equity requirement was increased from 5% to 10% for any portion of the purchase price of a property that is above $500,000, but less than $1,000,000.

For the complete news release, click here.