December 11, 2015 4:39 pm
Updated: January 22, 2016 5:19 pm

Calculator: How much will you need to save for a house now?

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Use the calculator above to compare the current minimums to the higher blended amount that will be required after Feb. 15.


Housing market experts as well as Finance Minister Bill Morneau suggested on Friday that higher down payment requirements on homes priced over half a million dollars will only affect a small number of buyers.

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The intent is to force prospective real estate purchasers of higher priced homes to save more before making a purchase, while experts suggest the main aim of Friday’s announcement is to tap the brakes on the red-hot markets of Vancouver and Toronto, where average prices have soared well above the half-million dollar mark.

READ MORE: Ottawa tightens mortgage rules to cool off red-hot Vancouver and Toronto

At a press conference in Ottawa, the minister said that as of Feb. 15, buyers purchasing homes between $500,000 and one million dollars will have to make a minimum down payment of 5 per cent on the first $500,000, and 10 per cent of the dollar value above that amount.

Morneau used the example of a $700,000 home, which will now require a minimum down payment of $45,000, or an increase of $10,000 above what the existing minimum of 5 per cent requires.

How it breaks down: A homebuyer looking to put the minimum down on a $700,000 home would have to commit at least 5 per cent of the first half a million dollars, or $25,000, plus 10 per cent of the remaining $200,000, which would mean another $20,000 (to arrive at $45,000). Under the current rules, which only require 5 per cent down on the entire purchase price, a $700,000 would only require a $35,000 down payment.

WATCH: Ottawa is implementing new mortgage rules next year, that will require some homebuyers to make a bigger down payment. Grace Ke explains.


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