Canada’s mortgage system enforced rule changes yesterday with the intent to enable more Canadian’s with buying power to enter the challenging housing market. For the first time since 2012, you are now able to purchase an insured mortgage up to $1.5 million – previous rule was capped at $1 million. This means you can put less than 20% down payment on an insured purchase – beginning with just as little as 5%. Keep in mind that the rule for minimum down payments still remains the same at 5% on the first $500,000 of the purchase price with 10% on the portion between $500,000 & $1.5 million.
A second rule change implemented allows first time home buyers and purchasers of newly built homes (new construction) to utilize up to 30-year amortizations provided the loan to value ratio is 80% or higher – meaning qualifications are not as difficult and monthly payments are more manageable.
Economists are predicting a busy spring market with the new rule change and the recent rate drop of 50bps (with further impending rate drops on the way). If you are in the market for a new home, be sure to reach out to your mortgage broker to see how these rule changes & economy updates can impact you!
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