A suite of new reforms to the Canadian mortgage rules was announced on September 17, 2024. Here’s what you need to know.
The $1 million price cap for insured mortgages will be increased to $1.5 million. This should help more Canadians to qualify for a mortgage with a down payment below 20 percent.
Expanding eligibility for 30 year mortgage amortizations to all first-time home buyers and to all buyers of new builds. This reform will reduce the cost of monthly mortgage payments with the hope of helping more Canadians qualify for a mortgage.
Both of these reforms become effective on December 15, 2024.
Earlier this year in the 2024 budget the Canadian Mortgage Charter was strengthened which now allows all insured mortgage holders to switch lenders at renewal without being subject to another mortgage stress test. This increases mortgage competition and allows more Canadians, with insured mortgages, to switch to the best deal.
New mortgage rules that came out earlier this year also included allowing 30 year insured mortgage amortizations for first-time home buyers purchasing new builds.
The strengthened Canadian Mortgage Charter also sets out the expectations of financial institutions to ensure Canadians in mortgage hardship have access to tailored relief and to make it easier to buy a first home.
Mortgage loan insurance will allow Canadians to get a mortgage for up to 95 per cent of the purchase price of a home, and it helps ensure they get a reasonable interest rate, even with a smaller down payment.
The Home Buyers’ Plan which enables first-time home buyers has been enhanced by increasing the limit from $35,000 to $60,000. This enables first-time home buyers to use tax benefits of RRSP contributions to save up to $25,000 more for their down payment.
Please feel free to contact me in complete confidence to talk about how these changes could affect your home buying future.
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