Federal Government implements new mortgage lending rules

The federal government is increasing the minimum down payment required to buy a home for more than $500,000 in an effort to cool the red-hot housing markets in Toronto and Vancouver.

Finance Minister Bill Morneau made the announcement in Ottawa on Friday.

The new regulations will require a minimum down payment of 10 per cent, up from five per cent, for the portion of property greater than $500,000. The minimum down payment on the first $500,000 of the house price will remain at five per cent.
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Finance Minister Bill Morneau announced new mortgage rules on Friday, Dec. 11, 2016 in Ottawa.

Canadians who already hold mortgages will not be affected by the new rules, Morneau said.

The new regulations will come into effect on Feb. 15, 2016.

The Multiple Listing Service HPI Benchmark value for a Single Family home in the Victoria core for November 2015 was $608,000. Expect to see a flurry of activity until the new legislation is introduced in the new year.