The Canadian Government has introduced legislation that will reduce the mandatory amount that home buyers have to put down on a home to avoid the expensive CMHC fees. Home buyers can now put down 20% instead of 25%.
Here is the article from The Globe and Mail:
…Canada’s big banks are applauding new legislation that lowers the required down payment for mortgages. The federal government said Friday it is lowering the minimum down payment requirement for mortgage default insurance from 25 per cent to 20 per cent
…Bank of Montreal says home buyers could save an average of $2,500 in insurance premiums, based on an average home price of $300,000. “We see a number of customers scrambling to meet the 25 per cent down payment, in order to avoid paying the insurance premium,” said BMO vice-president Cid Palacio. “These changes will allow those home buyers to reduce their down payment and get into their new home faster.”
…Royal Bank of Canada said a recent survey it did found 39 per cent of Canadians have borrowed against the equity of their home, by either refinancing their mortgage to a larger amount, or by taking out a home equity line of credit. “Now, with refinancing at 80 per cent, we’re making an extra 5 per cent equity available to our clients for their financing needs,”
This also means that people now using the Smith Manoeuvre have access to 5% more of their equity! Cannon_Fodder, time to re-work those spreadsheets! :)If you would like to read more articles like this, you can sign up for my free weekly money tips newsletter below (we will never spam you).