“Thank goodness the government took this approach rather than raising interest rates to cool the hot markets, as that would have had a wide brush-stroke negatively affecting markets that are more normal -- not only in activity but in house prices,” one commenter named Jeff wrote in REP’s forum. “Buying a home up to $1 million with 5% down and CMHC (insurance) is absolutely looney in the first place.
“CMHC has a sliding scale for insurance premiums why not apply a similar sliding scale for down payments as well”” he continued. “It can always be adjusted as values increase (or) decrease (and) cost of living (changes).”
Recently announced mortgage rules – which go into effect February 15, 2016 – will require larger down payments for pricier homes.
The minimum down payment for new insured mortgages will increase from 5% to 10% for the portion of the house price above $500,000.
Under the new rules, a $750,000 home will now require $50,000 down -- 5% for the first $500,000 and 10% down for the remaining $250,000.
And while initial fears were that the changes would force many Canadians out of the market, Realtors seem up to the challenge of helping those who may be impacted to find a home they can afford.
“To start off, anyone afraid of hard work shouldn't be in the business in the first place; and whose best interest are we supposed to be serving?” a commenter named Matt said. “If the client is better off looking at lower priced homes, then that is what they want, and it's our responsibility to keep their best interests at heart; not how much we're going to get paid based on the dollar value of the home.”
Real estate agents in Canada are not only confident new rules will have little impact; they are applauding CMHC’s efforts.