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First-time home buyers big losers as new down payment rules kick in: mortgage brokers

Last Updated Feb 15, 2016 at 8:33 am PDT

(iStock Photo)

New rules for down payments apply to homes priced higher than $500,000

VANCOUVER (NEWS 1130) – You’ll probably have to save longer to build up a down payment, thanks to new rules kicking in today.┬áThat’s what we’re hearing from a group representing mortgage brokers in this province.

Considering the new rules apply to every home priced higher than $500,000, the vast majority of properties in our region will need larger down payments than before.

“It’s going to affect some people,” says Ajay Soni, president of the Mortgage Brokers Association of BC. “But anybody that’s is able to qualify for that type of a mortgage amount — those larger mortgage amounts — can probably save the extra down payment. It’s probably going to delay their down payment by about three or four months, at most.”

Soni says the big losers here are first-time home buyers.

“It’s affecting the very people that the slowdown that they’re trying to create in house prices is intended for,” says Soni. “So it’s not, in our view, very necessary.”

The new rules were announced by the feds just before year’s end. The fine print means you’re required to put five per cent down on the first $500,000, and then an additional 10 per cent on any dollar value above that.