It has been a difficult few years for aspiring homeowners with the increased mortgage interest rates, lower appraisals, and a more stringent mortgage stress test by financial institutions in reviewing mortgage applications. As a result of these changes, there has been a significant decline in the real estate market across Canada and especially, Ontario.
In order to tackle these challenges, the federal government implemented some changes to the mortgage rules to encourage and make it easier and more affordable for aspiring homeowners on their journey to home ownership.
New mortgage rules came into effect as of December 15, 2024 making it easier for first time home buyers to achieve home ownership by way of lower mortgage payments.
The new rules increased the maximum amortization period to 30 years for all high-ratio mortgages whereby at least one of the purchasers is a first-time home buyer OR whereby the property is a new build that has never been previously occupied.
The requirements to qualify for these measures are the following:
- The mortgage must be a high-ratio mortgage (less than 20% down payment);
- The purchase price must be below $1.5 million;
- The property must be occupied by the Borrower, or a person related to the Borrower by marriage, common-law, or a parent-child relationship on a rent-free basis; and
- At least one of the borrowers must be a first-time home buyer, unless it is a newly built home that has never been previously occupied.
For additional information, you can review the link below directly from Canada Mortgage and Housing Corporation (CMHC).
This WARDS LAWYERS PC publication is for general information only. It is not legal advice, nor is it intended to be. Specific or more information may be necessary before advice could be provided for your particular circumstances.