December 16, 2022
The Canadian government has made significant changes to the eligibility criteria for insured mortgages, affecting many potential homebuyers. These updates primarily impact the down payment requirements and loan-to-value (LTV) ratios for properties priced up to $1.5 million.
For homes priced up to $500,000, buyers will still need a minimum down payment of 5%. However, for homes priced between $500,000 and $1.5 million, the required down payment increases to 10% on the portion of the purchase price above $500,000. For example, if you're buying a home for $1.2 million, you would need 5% down on the first $500,000 ($25,000) and 10% on the remaining $700,000 ($70,000), for a total down payment of $95,000. These changes are designed to help manage housing affordability, especially in markets where prices are rising. Buyers looking at higher-priced homes may need to save more for their down payment but can still access insured mortgages for homes up to $1.5 million.
Source: Absolute Mortgage Corp.
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