New Mortgage Rules in Effect Dec 15, 2024! 

The dream of homeownership is becoming more achievable, thanks to major mortgage reforms set to take effect on December 15, 2024. These changes are designed to make buying a home more accessible and affordable, especially for Millennials and Gen Z, by expanding options for insured mortgages and easing financial barriers. Whether you’re a first-time buyer or looking at new-build properties, these updates could significantly impact your buying journey. Here’s a breakdown of what you need to know.

Higher Insured Mortgage Cap:
The price cap for insured mortgages will increase from $1M to $1.5M, allowing buyers to qualify with as little as:

• 5% down on the first $500,000
• 10% down on the remainder, up to $1.5M
  This means a $1.5M home could require only $125,000 down compared to $300,000 for uninsured borrowers!

For instance, on a $1.2 million home in Vancouver, the new rules would allow a down payment of $95,000, compared to $240,000 under the previous system. This is based on a 5% down payment on the first $500,000, and 10% on the remaining $700,000. This change makes homeownership significantly more accessible for buyers who may have been previously priced out of the market due to high down payment requirements.

 30-Year Amortizations:
First-time buyers and new-build purchasers can access 30-year insured mortgages, reducing monthly payments —perfect for navigating high-interest rates. This also supports the construction of new homes, including condos, tackling Canada’s housing shortage.

To qualify as a first-time homebuyer:

• You must not have bought a home before.
• You must not have owned or lived in a home in the past four years.
• You must have recently gone through a marriage or common-law relationship breakdown, as recognized by the Canada Revenue Agency.
• For newly built homes, they must be brand new and not previously lived in, though new condos with interim occupancy still qualify. 

Changes Apply to High-Ratio Mortgages

These changes apply to high-ratio mortgages (those with a loan-to-value ratio of 80% or more) for homes occupied by the owner or close family members. The government has confirmed that current mortgage insurance rules will remain unchanged.

These new mortgage rules represent a significant step toward making homeownership a reality for more Canadians. With expanded eligibility, lower down payment requirements, and extended amortization options, buyers now have greater flexibility to navigate the market. As we move into 2025, falling fixed mortgage rates are expected to drive even greater demand for housing.

If you’re considering buying your first home or exploring your options, now is the perfect time to act.

Reach out today, and let’s discuss how these changes can work for you!