Qualification Updates to Insured Mortgages & First Time Home Buyers

Author: Boychuk Mortgage Group |

An Increase to the Insured Mortgage Price Cap:

The government has increased the price cap for insured mortgage from $1 million to $1.5 million, reflecting the realities of today’s housing market.
This change will help more Canadians qualify for insured mortgages with a down payment of less than 20% (80% loan-to-value or higher). This will make home ownership more attainable, especially for younger Canadians.

Eligibility for Insured Mortgage

  • The borrower is purchasing an owner-occupied home or second home with less than a 20% down payment.
  • The borrower’s purchase price is no greater than $1,5000,000.
  • 30-year amortizations will apply to first time home buyers, otherwise 25-year amortizations will apply.

The Minimum Down Payment Requirement on Insured Mortgages:

  • 5% for the portion of the purchase price up to $500,000, and
  • 10% for the portion between $500,000 and $1.5 million.

This means that buyers will be eligible to purchase an owner occupied home upwards of $1,500,000 with a minimum down payment of $125,000.

Effective December 15th, 2024.

 

Expanded Eligibility for 30-Year Amortizations:

Both first-time homebuyers and all buyers of new build homes will now be eligible for 30-year amortizations on insured mortgages.

This change will help more Canadians qualify for insured mortgages with a down payment of less than 20% (80% loan-to-value or higher).

This is a crucial step in reducing monthly mortgage payments and helping more Canadians achieve home ownership.

Eligibility for First Time Home Buyers

  • The borrower has never purchased a home before.
  • The borrower has not owned or occupied a principal residence in the last four years.
  • The borrower has recently experienced a breakdown in a marriage or common-law relationship, in line with the Canada Revenue Agency’s approach to the Home Buyers’ Plan.
  • The borrower is purchasing an owner-occupied home with less than a 20% down payment.

Eligibility for Buyers of New Build Homes

  • For buyers of newly built homes, the home must not have been previously occupied, though newly constructed condominiums with interim occupancy periods will still qualify.
  • The borrower is purchasing an owner-occupied home with less than a 20% down payment.

Effective December 15th, 2024.

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