Here’s what the Mortgage Rule Changes Look like
As of February 15th 2016 you’ll have to pay a minimum of 10% down on any amount over $500,000. For example you can still get away with 5% down on any amount up to $500K but you’ll be required to pay 10% on the amount over and above up to $1,000,000 then it’s 20% after that. Here’s how that looks.
What does the minimum down payment look like for a $900,000 home in Toronto?
$25,000 on the first $500K so 5%
$40,000 on the remaining $400K so 10%
$65,000 minimum down-payment is the absolute min so the minimum down-payment was raised from 5% to 7.22% on a $900K home.
But that’s not it. You have closing costs on top of that so if you’re not a first time buyer you’ll have to cough up a further $28,200 for Land Transfer Tax and about $1,500 for legal fees so if the very minimum you’ll need for this property is now $94,700 and would have been $74,700 prior to the rule change.
Confused? Hope not but if you are comment below, use our live chat, or contact us to follow up. There were other changes but this is one of the more important ones for first time buyers especially.