Banking regulator to hike amount of capital lenders must hold against mortgages + MORE Dec 13th

Finance Minister Bill Morneau announced Friday the government is increasing the down payment requirements for homebuyers seeking to purchase properties over $500,000. The move is designed to cool down the smoking-hot housing market in some of Canada’s biggest cities. Here are five things to know about the changes:
Who’s affected: Given Toronto and Vancouver are thought to be the targets of the new rules, first-time buyers in those cities — and perhaps their parents — will feel the pinch since they’ll be required to cough up bigger down payments to get into the market. Those selling their homes in order to size up, especially in cities with hot housing markets, likely won’t feel the pain since they’ve built up equity in those properties.
Dollars and cents: For someone purchasing a $700,000 home — a common list price in Toronto and Vancouver — the minimum down payment required will rise by $10,000 to $45,000.
How the new 10% minimum down payment works »
Price impact: The influence over prices should be small given the narrow reach of the new rules, analysts say…

If you’re trying to scratch together a down payment, or you sell mortgages for a living, today’s news could have been much, much worse. The new down payment rules Finance Minister Bill Morneau announced this morning were as benign a policy change as one could hope for. This refers, of course, to the new minimum down payment requirement, which takes effect on February 15, 2016. For properties between $500,000 and $1 million, folks getting an insured mortgage will now need to put more down—up to an additional 2.5% of the purchase price. In other words, 5% down will be required READ MORE

Canada’s top financial regulator wants to update the rules that govern how much capital lenders must hold to offset the risk that the residential mortgages on their books go bad.

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In the market to buy a home in 2016? You may need raid the piggy bank. As of Feb. 15, 2016, there will be changes to the rules for government-backed mortgages.
Buyers in the market for homes worth less than $500,000, will still only need 5% down but any purchase over $500,000 will require a graduated 10% minimum down payment. That means for every dollar a house costs over $500,000, a buyer will need 10% to cover the down payment. For instance:

House Price
2015 Minimum Down Payment Required
2016 Minimum Down Payment Required

$500,000
5% = $25,000
5% = $25,000

$800,000
5% = $40,000
5% on first $500,000 = $25,000 + 10% on next $300,000 = $30,000, for a total DP of $55,000

“This change is just one more step to try and cool the more active housing markets in Toronto and Vancouver,” says Alyssa Richards, CEO of RateHub.ca, “and the people most impacted will be first-time home buyers…

A new round of mortgage restrictions designed to reduce risky borrowing and rapid price growth have hit the market. Newly-minted Liberal Finance Minister Bill Morneau announced this morning that the minimum down payment has increased to 10% on a graduated scale for homes priced over $500,000 and 20% for homes priced over $1 million, to take effect in February 2016.
For example, if you’re looking to buy a $650,000 home, you will now be expected to pay a minimum downpayment of $40,000 compared to $32,000 under the old rules.
Here’s how the new graduated minimum down payment pricing works:
First $500,000 x 5% = $25,000
Remaining $150,000 x 10% = $15,000
Total: $40,000
The minimum down payment will remain 5% for homes priced below $500,000.
A Targeted Approach
This is a calculated approach to pump the brakes on runaway price appreciation and debt levels in Canada’s hottest markets, like Toronto and Vancouver, while leaving moderate markets relatively unscathed.
Stated Morneau in a speech from Ottawa, “The actions taken today prudently address emerging vulnerabilities in certain housing markets while not overburdening other regions…