The Canadian real estate market is about to experience a seismic shift, and it’s not just the prices that are rising—new mortgage rules are about to shake things up! Starting December 15, 2024, the federal government is introducing changes that will pull homeownership within reach for many Canadians. Whether you’re looking to buy your first home or upsize, these reforms are ground-breaking and could be the gravitational pull you need to enter the market.
Raising the Bar: The New $1.5 Million Insured Mortgage Cap
For years, homebuyers faced the 20% down payment barrier when purchasing homes priced over $1 million. But now, with the uplifting new changes, the insured mortgage cap has been raised to $1.5 million. This means that homes valued up to $1.5 million are now eligible for mortgage insurance, allowing buyers to put down less than 20%—bringing down the pressure of saving for a massive deposit. For high-cost markets like Calgary, Toronto, and Vancouver, this is a weighty opportunity, particularly for those looking to upgrade or purchase their dream home .
Lightening the Load: 30-Year Amortizations
Another ground-shaking change is the introduction of 30-year mortgage amortizations for first-time buyers and buyers of new builds. By stretching your payments over 30 years instead of the standard 25, your monthly payments will be significantly lighter. For example, on a $650,000 home, this could mean saving around $300 per month in mortgage payments. It’s a heavy lift in the right direction for buyers who need more breathing room in their budgets.
Gravity Check: What About Mortgage Insurance?
While these changes are great news for buyers, don’t forget about the gravity of mortgage default insurance. With a lower down payment, you’ll need to factor in the cost of mortgage insurance, which is tacked onto your mortgage. This insurance protects lenders, not buyers, in case of default, so make sure you weigh all the costs when calculating your homeownership budget .
What’s the Catch?
While these reforms make it easier to enter the housing market, it’s important to understand the long-term impact. A 30-year amortization means you’ll pay less each month, but over the course of your mortgage, you’ll end up paying more in interest. It’s a balancing act—you save on monthly costs but the overall price of the home could increase over time. That said, if your goal is to secure a home in a competitive market, these changes could provide just the lift you need .
What Does This Mean for Calgary Buyers?
For those in the Calgary real estate market, these changes are gravity-defying. With home prices inching up, especially in popular neighborhoods, the ability to buy with less than 20% down on homes up to $1.5 million is a game-changer. And with lower monthly payments on a 30-year amortization, this could be your chance to soar into homeownership more easily than before .
Looking to Defy Gravity? Let’s Talk!
Whether you’re a first-time buyer or looking to upsize, understanding these changes will help you make informed decisions. If you’re ready to make your homeownership dreams a reality, reach out today! I’m here to help you navigate these changes and keep your feet on the ground in Calgary’s dynamic real estate market.
Call Michael Newton at (403) 512-9825 or email michael@michaelnewton.ca for personalized advice on how these changes can lift your real estate plans to new heights.
Anchored in Service,
Michael Newton
Real Estate Advisor
michaelnewton.ca
