The Canadian government has made significant updates to mortgage lending rules, marking the first change to the price cap for insured mortgages since 2021. These changes have the potential to make homeownership more accessible for many buyers, particularly in Toronto. Let’s break it down.
Key Changes at a Glance
Mortgage Insurance on Properties up to $1.5M
For the first time, homes priced between $1 million and $1.5 million are now eligible for mortgage insurance.
This means buyers can secure these homes with as little as a 5% down payment, compared to the previous requirement of 20% in this price range.
30-Year Amortizations for First-Time Buyers of New Builds
First-time buyers can now opt for a 30-year amortization when purchasing newly built homes.
This will allow buyers who take advantage of this the option to lower their monthly payment by choosing a 30 year amortization. This of course will lead to more interest paid over the course of the mortgage, but the reduction in monthly payment just may be enough to allow you to afford a house.
What This Means for Toronto’s Real Estate Market
Toronto’s real estate market is already competitive, and these changes are likely to have a noticeable impact, especially since the 1million dollar cap came into effect in 2012 at a time when the average price of a house in Toronto was just under $500K. Today the average price of a property in Toronto is well over a million dollars, so the change is welcomed by many.
Increased Buyer Activity: With lower down payment requirements and extended amortization periods, more buyers can enter the market.
Potential Price Pressure: More buyers will lead to greater demand could put upward pressure on home prices, especially for properties between $1 million and $1.5 million.
Opportunities for First-Time Buyers: These updates make it easier for first-time buyers to secure homes that were previously out of reach.
How I Can Help You
As a dedicated real estate agent in Toronto, I’m here to guide you through these changes and help you navigate your next move. I have mortgage brokers that I work with regularly to get you the best mortgage out there and help you through the process of qualifying for a mortgage. Whether you’re a first-time buyer exploring your options or a seller looking to maximize your home’s value, I’ll provide the insights and strategies you need.
Ready to Take the Next Step?
Contact me today to discuss how these new mortgage rules impact your buying or selling journey. Let’s work together to make the most of this evolving market.
Wayne Bibby is a resident of Seaton Village and trusted real estate agent in Seaton Village, the Annex and beyond.
You can contact me at wayne@waynebibby.com.
Or you can call me at 416.997.4285.
Visit my website at waynebibby.com.
View First time home buyers section of my website right here.
