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12/11/2015  Mortgage regulations Update

Finance Minister Bill Morneau announced the plans on Friday morning in Ottawa. The required down payment on homes worth at least $500,000 will rise to 10 per cent from 5 per cent starting Feb. 15, 2016 – however the higher threshold will only apply to the portion in excess of that mark.
The minimum down payment for new insured mortgages will increase from 5% to 10% for the portion of the house price above $500,000, the finance ministry wrote.
For example: A $750,000 home will now require $50,000 down — 5% for the first $500,000 and 10% down for the remaining $250,000.
If you have a firm offer and an approval prior to February 15th, even if you are closing after that date, will still be able to put the minimum of 5% down. If you are currently in the market for a home with only 5% down available then now is the time to start looking and making offers before the new regulations take effect.


The Ontario government is one step closer to allowing all municipalities the ability to double the current land transfer tax on properties bought in Ontario.
If the municipal land transfer tax were to spread to other Ontario municipalities at a similar rate as Toronto, home buyers would be forced to pay over an additional $5,000 on the average priced home.  (Average house price as of October 2015 – Ontario $471,654, Hamilton-Burlington $436,562) Buyers are already stretched. They can’t take another tax burden like the municipal land transfer tax.
Finding affordable home ownership in Ontario is already a great challenge for many families. With incomes failing to keep pace with the prices in many housing markets, the MLTT could reduce homeowners buying power or delay purchases allowing more time to save the extra up-front cost.  Though there is a rebate of up to $2,000 for first time home buyers, this will not be of any help to someone who has owned property before.
The government is currently holding a consultation on the changes to the Municipal Act. Unfortunately, they may move forward with the MLTT despite public opinion.
The Ontario Real Estate Association is urging local residents to take a stand against this tax, and let their local MPP know of their position.  Learn more and register your opposition to the MLTT on donttaxmydream.ca.
To get an idea of how much the extra tax could cost you, use our land transfer tax calculator and select Toronto as your city.  If you have any questions, you can always contact us.