09/16/2024
Pretty huge mortgage news today, thank you for the detailed explanation, Zaheed Valli-Hasham - Mortgage Planner!
Effective Dec 15th, 2024:
1. Cap on insured mortgages increasing from $1M to $1.5M.
- currently it's not possible to buy for over $1M with less than 20% down.
- with this change, it will be possible to buy a primary residence upto $1,499,999 and not have to put down 20%.
- this does not mean you can buy up to that price with 5% down. Minimum down payment rules are still in place: 5% of the 1st $500,000, 10% of the balance.
- based on what I interpret from the release, this is available to all buyers, not just first-time home buyers.
- rentals do not apply
- Examples assuming they do not change the min down payment requirements:
$1,000,000 purchase - min down payment $200,000 ( currently ), $75,000 ( post - Dec 15th )
$1,250,000 purchase - min down payment $250,000 ( currently ), $100,000 ( post - Dec 15th )
$1,499,000 purchase - min down payment $300,000 ( currently ), $124,999 ( post - Dec 15th )
$1,500,000 and over - 20% down required
NOTE, buyers will still have to pay mortgage insurance if they do not have 20% down and of course be able to qualify for mortgage amount.
2. 30-year amortizations available for first-time home buyers on all builds
- last month they made 30-year amortizations available to first-time home buyers with less than 20% down on new builds, or pre-sales only. Previously, the max was 25 years.
- with this change, the extended amortization will now be available on existing resale properties.
- buyers will still need to pay mortgage insurance with less than 20% down, but this will help increase buying power and help lower mortgage payments.
- rentals do not apply
3. 30-year amortizations available for all buyers on new builds/pre-sales
- with this change, non first-time home buyers can also take advantage of 30 year amortizations with less than 20% down on new builds, or pre-sales only.
- buyers will still need to pay mortgage insurance with less than 20% down, but this will help increase buying power and help lower mortgage payments.
- is buying resale, the max is still 25 years.
- rentals do not apply
OTHER NOTES:
- I suspect these changes will be available on any purchase closing Dec 15th or after. I don't feel it will be based on the actual accepted offer date.
- on the rate front, inflation numbers will be release tomorrow, and are expected to be lower which will boost chances or another rate cut. The US Fed makes their rate announcement on Wednesday - expecting 0.25 - 0.50% cut there and that will also impact our rate cut outlook.
