Canada's New Mortgage Rules: 5 Things You Should Know

Posted: Updated:
Shutterstock / Casper1774 Studio
Shutterstock / Casper1774 Studio

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. 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.


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 in stages to 25 years from 40 years and the maximum insurable house price was limited to below $1 million.

Also On HuffPost:

Mortgage-Free: How To Put Your New Funds To Use
Share this
Current Slide

Around the Web

Canada Mortgage Rules - Huffington Post