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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 

For more information, please contact me today.