# New mortgage rules on homes over \$500K

The federal government is increasing the down payment on homes over \$500K in the new year.   They are increasing the required downpayment to 10%, but only for the portion of the price over \$500K.

That means if you are buying a house for \$700K, you would be required to put 5% down on the first \$500K, then 10% on the remaining \$200K of the price.

Purchase price of \$700K

5% on first 500K = \$25,000

10% on the next \$200K = \$20,000

Total  amount paid = \$45,000 an increase of \$10,000

How much will it affect homebuyers here in Brandon?

In 2015, in Brandon, there were 16 homes that sold for over \$500k.  9 of those were under \$600K, and 5 more were under \$650K,

On the initial purchase price of a \$650k home an extra \$7,500 will be required on a down payment.

Given the small number of homes sold for over \$500k the impact in Brandon will be minimal.  For markets like Vancouver and Toronto where average homes sell for considerably more than \$500k this change will be much more significant.