The federal government is boosting the minimum down payment for higher-priced homes in Canada effective in the new year.

The bad news isn’t as bad as we anticipated….. yet.

Starting in February 2016, CMHC will require a 10 per cent down payment on the portion of any mortgage it insures over $500,000. The five per cent rule 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.

At the end of the day.  The majority should not be affected by this adjustment, and seems to be a fairly reasonable protection for the Canadian Economy.  Most First Time Home Buyer’s with only 5% down mortgage won’t be purchasing a property valued over $500,000 amount to finance in Britsh Columbia’s general real estate.

However, this does pose a major set back for customers wishing to buy affordable single family dwellings in deep greater Vancouver region.

Our new finance minister Bill Mourneau says and I quote “We recognize that, specifically in the Toronto and Vancouver markets, we have seen house prices that have been elevated, and we want to make sure we create an environment that protects the people buying homes so they have sufficient equity in their home.”

The general consensus is that this should have minimal impact on the Canadian real estate market, but rather looks to be a good move in protecting equity in current canadians houses, by keep risk low for first time home buyers and what is considered their affordability buffer.

What do you think? Is this start of something bigger? Could we see 5% down gone completely in the next few years?