Government Announces Biggest Changes to Mortgages Rules In Decades!

The federal government is introducing 30-year amortization loan periods for all first-time homebuyers as well as buyers of new builds, even if it’s not their first home.

The government has also expanded mortgage insurance qualification to cover houses that cost more than $1 million, up to $1.5 million.

These changes are set to take effective Dec. 15, 2024.

THE BENEFITS FOR BUYERS

By stretching their payments for more years buyers can reduce their monthly payments increasing affordability and helping them pass the mortgage stress test when qualifying.

With mortgage insurance expanding to homes $1M - $1.5M more buyers will be able to enter the market in areas where average home prices are over the $1M mark with lower downpayment’s, including many neighbourhoods across the GTA. 

THE DRAWBACK 

The most obvious is that it will take longer to pay off your loan and that means you are paying interest for longer which means more interest over time.

HOW WILL THIS IMPACT THE REAL ESTATE MARKET

These changes may lead to an uptick in prices by bringing more buyers to the market, especially at a time where interest rates are coming down from recent highs. 

It is likely to have the biggest impact on homes valued just over the $1M mark by increasing the buyer pool for these homes which may send a ripple through the market and add to upward pressure on prices.

To learn more about how these impacts may affect your real estate goals, please reach out, we are always excited to share our knowledge and help you achieve success.