I am about to buy new snow tires for my 5 which has factory 17"(205/50r/17 tires) rims but I want to put on 16" rims with equivalent diameter 16" tires(205/55/r16) as the original 17' tires. My question is will the new smaller 16" rims facilitate the brake calipers to have enough clearence because of the smaller inside rim radius?

 

It depends entirely upon the wheels. If you find a used set of Mazda wheels from say a Mazda3, you'll be good to go; your other option is to go to TireRack.com and buy a 16" winter wheel/tire package sized correctly for your car (they'll do all of the sizing for you, you just pick the wheels and tires and they'll do the rest).