New Mortgage Rules In Canada What You Need To Know | Adam Walker Mortgages
The Canadian mortgage sector underwent rapid transformations during the last few months. A large number of Canadians face similar struggles while attempting to understand recent mortgage rules and strategies. The numerous mortgage updates spark my regular analysis because I dedicate my life to mortgage rules and strategies.
This detailed breaks down the significant recent mortgage modifications and their meanings and potential impacts on homeowners and purchasing individuals active in Southern Ontario's real estate market.
August 1, 2024: 30-Year Amortization for First-Time New-Build Buyers
The period for insured mortgage amortization used by first-time homebuyers for new-build properties got extended up to 30 years by the lenders.
What This Means:
The extended monthly repayment schedule across thirty years decreases homeownership costs, thus increasing first-time buying possibilities.
The updated payment terms create better financial opportunities for homebuyers who operate under present high interest rates while enabling them to secure pricier properties.
New-build homes represent the main focus of this policy, which supports construction efforts as Canada addresses its deficient housing market.
The Federal Bank of Canada made this amendment to help purchasers from Southern Ontario successfully acquire reasonably priced homes, although demand for such housing remains elevated. The high demand for affordable housing should stimulate developers to construct new developments throughout Simcoe and both Norfolk County and Brantford.
November 21, 2024: Stress Test Removed for Uninsured Renewal Switches
This change marked a significant win for homeowners. The OSFI stress test, which previously made it challenging to switch lenders at renewal, was removed for uninsured mortgage switches.
What This Means:
Homeowners gain better flexibility through market advantages because they face reduced barriers to comparison and switching to different lenders for improved rates during renewal time.
The change promotes lending institutions to compete for customers by providing better interest rates to maintain their client base.
Homeowners will achieve significant savings in the thousands during their mortgage term because they can easily change to lower interest rate options from alternative lenders.
Homeowners planning to renew their mortgage terms should consider the latest changes as an optimal opportunity for exploring various options. Your current lender's proposal won't meet your expectations, so we should review how I can help you acquire the most suitable offer.
December 15, 2024: Major Insured Mortgage Changes
Two significant updates take effect on this date:
Increased Home-Price Cap for Insured Mortgages
The home-price cap for insured mortgages will rise to $1.5 million (up from $1 million).
Applies to primary and secondary homes only.
30-Year Amortization Option Expanded
The 30-year amortization option is now available for first-time buyers and buyers of new-build homes with insured mortgages.
Comes with an additional insurance premium.
What This Means:
Wider Access for Buyers: Raising the cap to $1.5 million opens the door for buyers in higher-priced markets, such as those in Southern Ontario outside the GTA.
Support for New Builds and First-Time Buyers: These changes aim to make new-build properties more accessible while also helping first-time buyers enter the market with reduced monthly payments.
Rising market demand would occur as homeowners find homes more affordable and accessible during 2025, which could lead to higher home values.
The time is right for interested homebuyers to make their purchases because demand could soon raise housing costs.
January 15, 2025: Insured Refinances for Secondary Suites
The government is introducing a new option for homeowners looking to refinance to build secondary suites.
Key Features:
Refinance Up to 90% of Improved Property Value: For construction or renovation of secondary suites (e.g., basement apartments or laneway homes).
30-Year Amortization Option: Available with an additional insurance premium.
What This Means:
This initiative stimulates property owners to develop rental options, which work to solve the current real estate supply shortage.
Extra rental income from secondary suites supplies additional income potential for homeowners to sustain their ownership.
The program enables more households to build multi-generational housing options for families who select this living arrangement.
However, refinancing up to 90% of your home’s value can leave little equity and comes with risks. If you’re considering this option, let’s discuss how to structure it responsibly.
How These Changes Affect Southern Ontario
For homeowners and buyers in Southern Ontario—outside the higher-priced GTA markets—these changes bring a unique set of opportunities:
Affordability Improvements: The extended amortization and increased insured mortgage cap make it easier to buy in growing communities like Norfolk County or Haldimand County, where home prices are still more attainable.
Encouraging New Builds: Builders may respond to these changes with increased development in towns like Brantford, offering more options for first-time buyers and families.
Rental Potential: The insured refinance program could lead to more secondary suites, helping address the rental shortages in smaller towns while providing homeowners with additional income streams.
My Take: What Should You Do Next?
These changes present great opportunities—but also some challenges. Here’s what I recommend:
First-Time Buyers: If you’re considering entering the market, the expanded 30-year amortization and higher insured mortgage cap give you more flexibility. Acting sooner could help you beat rising demand and prices.
Homeowners with renewals: Take advantage of the removal of the OSFI stress test to explore better rates at renewal time.
Homeowners who plan to construct secondary suites can learn about the insured refinance program as a potential solution from this setup.
Ready to Make Your Move? Let’s Chat!
I am available to assist you when handling these changes to maximize available opportunities. Together we will create an approach that suits your needs if you want to buy your first effects or refinance or renew your existing mortgage.
Your Friend in the Mortgage Business,
Adam Walker
Walker Mortgages
226-567-4274 ext. 1
[email protected]
