Big mortgage changes coming in December for Canadian home buyers, particularly first time home buyers and those renewing a mortgage.

Here are the key points of Canada’s new mortgage rules for loans up to $1.5 million, effective from December 2024:

1. **Higher Insured Mortgage Cap**: The insured mortgage cap has been raised from $1 million to $1.5 million, allowing buyers in expensive markets more flexibility in accessing government-backed mortgage insurance.

2. **Lower Down Payment Requirements**: For homes priced up to $1.5 million, buyers can now pay as little as 5% on the first $500,000 and 10% on the remaining balance, significantly lowering the initial costs compared to the previous 20% down payment rule.

3. **30-Year Amortization Option**: First-time homebuyers can now choose a 30-year amortization, which reduces monthly payments but increases the overall interest paid over the life of the loan.

4. **Stress Test Exemption at Renewal**: Buyers switching lenders at mortgage renewal will no longer need to pass the mortgage stress test, making it easier to shop for better interest rates.

5. **First-Time Buyer Focus**: These changes primarily benefit first-time buyers, especially in high-cost markets like Toronto and Vancouver, making homeownership more accessible.

Wondering how these changes could impact a potential home purchase? Thinking about selling a property that will likely be listed under $1.5m? Let’s chat.

*source: Canadian Mortgage Trends