Changes to the CMHC Mortgage Downpayment requirements

Changes to the CMHC Mortgage Downpayment requirements

On February 15th, 2016 new rules are coming into effect regarding the minimum downpayment required when purchasing a home.

These changes are only applicable to home purchases for values of $500,000 or greater. If you are considering purchasing a home and the value is below $500,000, the standard requirement for a minimum of 5% downpayment would apply.

If you are planning on buying a home with a purchase price above $500,000, the changes will have an impact on the minimum funds required for your downpayment. Prior to February 15th, 2016 you could purchase a house with a price of up to $999,999 and put as little as 5% down. After February 15th, 2016 the new rules state:

A borrower can place 5% down for the 1st $500,000 in purchase price; then 10% down for any amount above that; up to a max purchase price of $999,999.


As an Example:

You are purchasing a home worth $750,000. The total down payment required as of February 15, 2016 is $50,000. This is an increase of $12,5000 from the previously required $37,5000.

($500,000 x 5%= $25,000) + ($250,000 x 10% = $25,000) = $50,000

A first time buyer would now be expected to have a minimum of $72,000 when buying a home for $750,000 in Toronto. This total includes the minimum allowed downpayment and closing costs. This closing cost calculation factors in Municipal & Provincial land transfer taxes, as well as legal costs and applicable HST.  Calculation is also taking into account any rebates that 1st time buyer would receive.

Please keep in mind that you cannot purchase a home with less than 20% down when price is $1MM or above.  These rule changes will impact buyers looking in the $500,000 to $999,999 purchase price range only.

If you have any questions or would like to discuss how the new rule changes may impact purchasing a home, please feel free to call our office at 647-352-5825.