Mortgage Down Payments Should Go to 10%, National Bank CEO Saysby
Louis Vachon says requirement should rise for all house values
Currently, value of home below C$500,000 only requires 5% down
Canadian mortgage down payments should return “over time” to 10 percent from five percent for all homes to help cool soaring prices, National Bank of Canada Chief Executive Officer Louis Vachon said.
“For the longest time, we had minimum 10 percent cash down and we had 25-year maximum amortization and that worked very well," Vachon, 53, said Wednesday in a telephone interview. “I think over a period of time that’s where we need to gravitate back to."
Canada raised down-payment requirements to 10 percent for the portion of the house above C$500,000 ($382,000) in mid-February.
“Generally what we’ve seen from the regulators is a good approach," Vachon said. "They’re targeting very specific markets and segments where they feel there’s a higher risk, and that is a far better approach that what we’ve seen in other countries."