What’s New in Insured Mortgages?
Canada’s insured mortgage landscape is undergoing significant changes as of December 2024, aiming to improve affordability and access to housing:
Extended Amortization Periods: 30-Year Amortizations Expanded
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- Now available to first-time homebuyers (FTHBs) of any owner-occupied home, in addition to all new-build property buyers.
- Increases purchasing power (e.g., a $75,000 annual income qualifies for 7.2% more financing on a 30-year term, even with a 20 bps surcharge).
Higher Price Caps for Insured Mortgages
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- The price cap has been raised from $999,999 to $1,499,999.
- This enables buyers to purchase homes up to $1.5M with smaller down payments (e.g., a $1.5M home now requires a $125K minimum down payment, compared to $300K previously).
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No Changes to Down Payment Structure:
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- 5% on the first $500,000.
- 10% on the portion between $500,000 and $1.5M.
Important Note: While First Time Home Buyers have access to minimum down payments, they may need to put more down if they cannot debt service the minimum amount.
What is an Insured Mortgage?
This applies when the borrower has less than a 20% down payment.