Downpayment news for mortgage shoppers
Important News for Mortgage Shoppers
The Federal government announced on Friday that the minimum down payment for homes priced over $500,000 will increase. Currently, the minimum down payment for a home is 5% of the purchase price. Effective February 15, 2016, the down payment will increase to 10% on the portion of the purchase price between $500,000 and $1 million. For example, a home costing $700,000 would require a $45,000 down payment - a 5% down payment on the first $500,000, added to a 10% down payment on the remaining $200,000.
Please see the below table that outlines the change in detail. Buyers shopping for homes below the $500,000 mark will be unaffected by the new rules.
|
Minimum Down Payment by Home Purchase Price: Existing and New Eligibility Rules |
||||
|
Existing Eligibility Rules Eligibility Rules Effective February, 2016 |
||||
|
Home Purchase Price |
Minimum Down Payment Percentage |
Minimum Down Payment Amount |
Minimum Down Payment Percentage |
Minimum Down Payment Amount |
|
$500,000 and below |
5.0% |
up to $25,000 |
5.0% |
up to $25,000 |
|
$600,000 |
5.0% |
$30,000 |
5.8% |
$35,000 |
|
$700,000 |
5.0% |
$35,000 |
6.4% |
$45,000 |
|
$800,000 |
5.0% |
$40,000 |
6.9% |
$55,000 |
|
$900,000 |
5.0% |
$45,000 |
7.2% |
$65,000 |
|
$999,999 |
5.0% |
$50,000 |
7.5% |
$75,000 |
|
$1,000,000 and above |
20.0% |
$200,000 and up |
20.0% |
$200,000 & up |