Downpayment rules in Canada are changing on December 15th

Starting December 15th, the minimum downpayment for homes over 1M in Canada is changing.

$1M Purchase = $75K

$1.1M Purchase = $85K

$1.2M Purchase = $95K

$1.3M Purchase = $105K

$1.4M Purchase = $115K

$1.499M Purchase = $124,999

The increase in the insured mortgage cap to $1.5 million indeed has the potential to facilitate homeownership for many Canadians, particularly in high-priced markets like Toronto and Vancouver. This change could enable buyers to enter the market with lower down payments, making it easier for them to secure homes that were previously out of reach.

It's great news, right? However, the larger mortgages could lead to increased debt levels for buyers, alongside higher interest payments over the loan's term. This situation may put additional financial pressure on homeowners, especially if interest rates rise or if there are fluctuations in the housing market.

The anticipated demand for freehold properties in the $1M to $1.5M range may contribute to increased competition, driving up prices in that segment even further. Buyers should carefully assess their financial situations and consider market trends before making significant purchasing decisions. Additionally, it's crucial for potential buyers to consult with financial advisors or mortgage specialists to understand the implications of taking on larger debt.

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