What to expect with the new down payment rules.

There is a lot of talk about the new rules regarding mortgages and down payment, so I thought I would explain it clearly so you know what to expect when buying your new house. The current rules are that if you are buying a house under $1,000,000 you can have a loan to value ratio of 95%, meaning that you only have to put 5% down payment into the purchase. As of Feb 15, 2016 the new rules will be that everything up to $500,000 is still at 5% minimum down payment and the portion above $500,000 will increase to 10% down payment. For example, on a purchase of $600,000, your total down payment would be $35,000 (5% for the $500,000 and 10% for the remaining $100,000 =$600,000). This will effect a smaller number of people than we are lead to believe as most 1st time buyers are purchasing under the $500,000 mark. In Calgary the median price is around the $450,000 range, meaning that the majority of homes sold are under the $500,000 mark anyway. As buyers get into the more of the luxury market, they tend to have more of a down payment built up and in a lot of cases, are putting more than 10% down anyways. What does this mean for you? Well, if you are among the few that are purchasing a house between $500,000-$1,000,000 and only putting down 5%, then you have until Feb 15, 2016 to avoid the increase. For more information call 403.921.5635, I always love talking about real estate!  

Comments:
No comments

Post Your Comment:

Data is supplied by Pillar 9™ MLS® System. Pillar 9™ is the owner of the copyright in its MLS®System. Data is deemed reliable but is not guaranteed accurate by Pillar 9™.
The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA. Used under license.