Mortgage industry insider says Finance is pondering hike to minimum down payment
December 3, 2015
Big news today that could affect the Toronto Housing market. According to the Financial Post (and many other outlets) a mortgage industry insider says the Liberal Government is considering raising the minimum downpayment for a home to 10%, up from 5%.
This could have an impact on Toronto homes and condos as it’s first time buyers who make up a large part of the market.
The Post’s Gary Marr writes, “It’s a move, if implemented, that would heavily impact first-time buyers who are considered crucial to the housing market. It would make it tougher for them to borrow because they would have to come up with a larger down payment. (For example, on a $700,000 home, homeowners would need up to produce $70,000 instead of the current $35,000.”
There could be a sliding scale, however. For homes under $500K, the 5% minimum would apply, homes between $501K and 699K would see a 7% minimum and buyers looking for homes over 700K would face a 10% minimum down payment.
“It would be a further tightening of access to credit for first-time home buyers,” said Phil Soper, chief executive of Royal LePage Real Estate Services told Marr. “If they are going to be further deleveraging of risk, a graduated downpayment system where buyers with very expensive homes pay a larger downpayment, makes sense.”
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