Arlene Mazerolle

New Mortgage Rules Protect 1st Time Buyers

15 December 2016
Arlene Mazerolle

The Canadian government recently raised the minimum downpayment to purchase a home from 5% to 10% for homes over $500,000.

The change primarily protects 1st time buyers by reducing their debt. A larger downpayment equals a smaller mortgage and less interest paid overtime. At the end of a 25 year amortization period the owner will be paying less with a 10% downpayment than with a 5% downpayment. It is also meant to protect home owners should the housing market take a sudden and unexpected plunge similar to what occurred in the United States.

Those who currently own a home in Toronto have seen the value of their home increase substantially. The increased downpayment required to purchase another home generally becomes irrelevant for owners with equity in their homes. November 2016 statistics reveal that the price of homes in Toronto rose by approximately 23% compared to November 2015.


Formerly, to purchase an $800,000 home, the minimum downpayment was 5%, which equated to $40,000. The new rules require 10% down for the amount over $500,000. That $800,000 home will now require the consumer to pay $55,000 for their downpayment.

All in all a good protective measure for Canadian consumers.

For more information or a free property evaluation of your home contact Arlene Mazerolle at 416-203-6636