Finance Minister boosts down payment rules for mortgages

Homebuyers are currently required to put down a minimum of five per cent to qualify for Canada Mortgage and Housing Corporation insurance --- protection that lenders insist on when providing a mortgage worth more than 80 per cent of the home's value.Starting in February, CMHC will require a 10 percent down payment on the portion of any mortgage it insures over $500,000. The five per cent rules remains the same for the portion up to $500,000.Once the new rules are implemented in 2016, someone looking to buy a $750,000 home would need to have a minimum down payment of $50,000, which is what you get when you add five per cent of $500,000 and 10 per cent of the remaining $250,000.Banks are forbidden to provide "high-ratio" mortgages — when the amount being borrowed is more than 80 per cent of the home's purchase price — without taking out insurance for it.