Market Update: CMHC Ups Required Down Payment for High-Worth Homes

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TORONTO – Thanks to a new mortgage insurance change introduced by the Canada Mortgage and Housing Corporation (CMHC), Canadians looking to buy a high-value property this winter may want to consider making their purchase by Valentine’s Day.

As of February 15, there will be new mortgage insurance changes coming into effect that require buyers to pay at least 10 per cent down on ‪homes with a final purchase price of $500,000 or higher. (Previously, the minimum down payment amount for insured mortgages was five per cent, regardless of home value.)

To get a better idea of how this regulatory change will affect GTA buyers, we spoke with Shubha Dasgupta, a mortgage broker with Dominion Lending Centres and regular mortgage correspondent for GTA Real Estate News.

Q: Can you provide us with some information on the context for this newest CMHC change?

A: Over the past five years, the Finance Minister has implemented stricter lending guidelines with a purpose of “slowing” a rapidly appreciating Canadian housing market. Some of these rules have included (but are not limited to) decreased amortization, reduced debt servicing ratios, and increasing the qualifying rate.

All of these rules are in anticipation of providing a cooling effect in lieu of any potential future rate increase, given the state of the national and global economies. It was in a similar fashion that the Finance Minister recently introduced this new guideline, increasing the minimum down payment on homes costing between $500,000 and $1 million.

What are your thoughts on the extent to which the intended “cooling effect” will have an impact on the market?

Opinions are mixed on whether this will have a potential cooling effect. As is the case with any change to mortgage rules, anticipation quickly builds regarding the potential effects and impacts. However, as we’ve seen over the past few years, Canadians have been quick to adapt to changes — and I suspect this one will be no different.

Many industry professionals, including myself, feel that a rate increase would be the only way to slow the strong growth we are experiencing.

Realistically, what proportion of GTA home buyers are likely to be affected by this change?

I would agree with the [CMHC’s] assessment that a small percentage of homebuyers will feel an adverse effect from this.  In my experience, home buyers looking at properties worth more than $500,000 generally have the resources to accommodate an increase of this scale.

For more information about acquiring a mortgage, or the types of mortgages available to Canadians, we invite our readers to get in touch with Mr. Dasgupta directly via his web site at

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