Big News for Buyers as Insured Mortgage Cap Rises
Big News for Buyers as Insured Mortgage Cap Rises. The federal government has just released the technical details of its latest mortgage changes, set to take effect on December 15, 2024. These updates are designed to make housing more affordable and accessible, especially for first-time homebuyers and those looking to purchase new homes.
Mortgage Cap Rises – Higher Price Cap for Insured Mortgages
Insured Mortgage Cap Rises. The most significant change is the increase in the price cap for insured mortgages, which is rising from $1 million to $1.5 million. Buyers purchasing homes within this range can now qualify for high loan-to-value mortgage insurance. This change is crucial in markets like Toronto and Vancouver, where housing prices often surpass the previous limit.
Key Down Payment Requirements Include:
- 5% for the portion of the purchase price up to %500,000
- 10% for the portion between $500,000 and $1.5 million
This update means buyers can purchase a $1.5 million home with a $125,00 down payment, significantly lower than the $300,000 previously required for uninsured borrowers.
30-Year Amortizations Expanded
The government is also expanding 30-year amortizations for insured mortgages, giving first-time homebuyers and those purchasing new builds the option for longer repayment periods. This can lower monthly payments, easing the financial strain of high-interest rates.
Eligibility For 30-year Amortizations Applies To:
- First-time homebuyers
- New builds that haven’t been occupied
Market Impact
These changes are expected to boost housing demand. With lower down payments and extended amortizations, more buyers will have access to the market. Economists anticipate these changes, along with falling fixed mortgage rates, could strengthen the housing market in 2025.
Questions?
If you have questions please contact Client First Mortgage Solutions. We are here to discuss everything mortgage.
Original Article – Canadian Mortgage Trends – Steve Huebl – September 24, 2024
