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Canada Faces House-Price Pickle in Tighter-Mortgage Push

  • Finance department pushing for down payments of 10 percent
  • Previous minister rejected proposed increase this year
A new housing development stands in this aerial photograph taken near in Fort McMurray, Alberta, Canada, on Thursday, June 4, 2015. Canadian stocks rose a second day as commodities producers rallied after the price of oil climbed to the highest level this year while gold and copper led metals higher.
Photographer: Ben Nelms/Bloomberg
Updated on

Canada’s Finance Minister Bill Morneau faces a delicate decision on housing as his own officials push for tighter mortgage rules to cool Toronto and Vancouver real estate.

The finance department recommended raising the minimum down payment on insured mortgages to as high as 10 percent from 5 percent for homes above a certain value, according to people familiar with the plans, speaking on condition they not be identified because the deliberations aren’t public. While former Finance Minister Joe Oliver rejected the recommendation earlier this year, department officials raised the proposal again at an October meeting with industry representatives, according to one of the people.