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.