Under federal rules taking effect in December, a down payment on a $1-million home will cost $75,000, down from $200,000 under the current policy.
The federal government’s new mortgage rules will significantly reduce down payments for home buyers on homes worth more than $1-million, according to technical details released Tuesday.
Sean Fraser, the federal Minister of Housing, Infrastructure and Communities, said at a news conference that the mortgage changes are going to “potentially reduce the down payment required by tens of thousands of dollars for people trying to get into the market, particularly in larger urban environments where the purchase price is much higher.”
Someone buying a home that costs less than $1-million may make a down payment of less than 20 per cent, but they would be required to take out mortgage insurance to protect the lender. Currently, insured mortgages are only available for homes that cost less than $1-million and are based on the size of the loan relative to the buyer’s down payment.
Realtors and mortgage brokers have said the higher insurable amount will help buyers who were looking in the $1-million price range. As for making the minimum down payment on a $1.5-million home, that will mostly help high-income Canadians.
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