One of the most radical changes to home ownership in Canadian history was announced two days ago with barely a whimper in the press. According to this press release from the Canada Mortgage and Housing Corporation, an agency of the Federal Government, the five percent down-payment for a mortgage will soon be a thing of the past:

Under this new product, effective March 1, the down payment can come from any source such as, lender incentives and borrowed funds. However, borrowers will still have to prove their ability to meet their debt requirements in order to qualify for mortgage insurance.

Under the new product, lenders will be able to offer Canadians a variety of mortgage product offerings including mortgages with terms as low as six months and fixed, adjustable and capped interest rate loans.

So basically, you can expect a flurry of ads soon from lending agencies competing for the best value they will offer to prospective buyers for that last 5% of borrowing. Effectively, the bank will now lend you 100% mortgages composed of 75% uninsured mortgage, 20% CMHC insured mortgage, 5% CMHC insured second mortgage or line of credit...or just cash back. With mortgage rates so low, competition should be fierce offering buyers great deals under this new and additional lending opportunity.

Now if they could get the income tax deduction for mortgage interest and other borrowing costs, we'd be near civilized. In any event, this will support a big shift from renting.