Dec 11, 2015
By Jane Brown
Canada’s new finance minister is taking steps to cool off the booming real estate market in some of the country’s biggest cities.
Bill Morneau announced this morning that as of February 15th, the governing Liberals are increasing the amount home buyers must put forward as a down payment on homes over $500,000.
The down payment on the first $500,000 remains at 5 percent, but the down payment for any amount higher than $500,000 will be increased to 10 percent.
“In layman’s terms, we recognize that specifically in the Toronto and Vancouver markets, we’ve seen house prices that have been elevated and we want to make sure that we create an environment that protects the people that are buying homes so that they have sufficient equity in their home,” Morneau explained as the reason for the change.
Any home below $500,000 will still require a five percent down payment.
The move is expected to take pressure off the Canada Mortgage and Housing Corporation, which offers mortgage loan insurance for properties valued below $1 million.