Housing Market Trend: Low Borrowing Rates; Possible Minimum Down Payment Increase.

On December 02, 2015, Bank of Canada has announced to remain the overnight lending rate at ½ per cent. Our current prime rate stays unchanged at 2.70%.


With the new government’s plan to run the economy with expected deficient, the likelihood of raising prime rate is very slim, maybe even cutting the overnight rate in the future. Consequently, the major banks have started to reduce the discount to prime in the last quarter of 2015 in order to protect their interest and profit. Will the higher borrowing cost slow the housing market? Unlikely. After the banks increase their lending rates, the 5-year fixed rate is still below 3%, which is still very low when comparing to what we had 5 to 10 years ago.


As a measurement to control the housing market, the government is proposing to increase the minimum down payment from 5% to 10% in certain type of transactions.

The rumor has it, for properties below $500K, the minimum down payment will remain 5%. For properties between $500K to $700K, the minimum down payment is going to be 7%. For properties higher than $700K, the minimum down payment will be 10%.

Will the new measurement been pushed forward? Let’s just wait and see.


What do all these mean to consumers?

For those of you already own a home (or a few properties) out there, rest assure that the interest rates are going to stay low for another year or two.

For those of you who are looking to become a home owner, it’s the perfect time to get on it while you can still make 5% down payment and take advantage of the low interest rate environment.


For Valueland’s latest mortgage rates, please refer to our latest rate sheet here.