Changes Coming to Canadian Mortgage Rules
September 20, 2024 | Posted by: Keith Leighton
Changes Coming to Canadian Mortgage Rules
Canada is set to introduce significant changes to its mortgage rules starting in December 2024, aiming to improve affordability, especially for first-time buyers and those in high-cost cities like Toronto and Vancouver.
One of the biggest updates is the extension of 30-year amortization periods for insured mortgages, allowing first-time homebuyers to spread their payments over a longer period. This change will reduce monthly payments by around 9% compared to 25-year terms, making it easier for buyers to manage costs, although they will pay more interest over the life of the loan. This option is also being extended to buyers of preconstruction homes, which includes investors.
Another major shift is the increase in the insured mortgage price cap, from $1 million to $1.5 million. This will enable buyers to qualify for a mortgage with a lower down payment in high-cost markets. For example, a $1.5 million home will now require a minimum down payment of $125,000, significantly less than before.
These changes aim to address rising housing costs and provide more opportunities for Canadians to enter the housing market, though there are concerns that they might further drive up home prices due to increased demand. The reforms reflect the government's broader strategy to make housing more accessible, especially for younger Canadians and first-time buyers. Contact your DLC Ideal Mortgage expert to learn more.
