Top 5 Mortgage Rule Changes in British Columbia
1. Increase in Insured Mortgage Cap: Effective December 15, 2024, the federal government is raising the insured mortgage price cap from $1 million to $1.5 million. This change allows buyers in high-cost markets like Vancouver to purchase homes up to $1.5 million with a down payment as low as 5% of the first $500,000 and 10% of the balance.
2.Expansion of 30-Year Amortizations: Starting December 15, 2024, all first-time homebuyers and buyers of new builds can access 30-year amortization periods for insured mortgages. This extension aims to lower monthly payments, making homeownership more accessible.
3.Removal of Stress Test for Uninsured Renewal Switches: As of November 21, 2024, the Office of the Superintendent of Financial Institutions (OSFI) has removed the federally required mortgage stress test for straight, stand-alone uninsured mortgage switches at renewal. This change allows homeowners to switch lenders without undergoing a new stress test, potentially securing better rates.
4.Introduction of Insured Refinances for Secondary Suites: Beginning January 15, 2025, eligible homeowners can access insured refinances for up to 90% of their property’s improved value (capped at a $2 million home value) for construction funds. This initiative encourages on-property density and aims to alleviate housing and rental supply issues.
Here’s an example of how the reduced down payment works under the new insured mortgage cap for a $1 million purchase:
Before the Change (Cap: $1 Million)
If the purchase price is $1 million or higher, a 20% down payment is required because homes over $1 million do not qualify for mortgage insurance.
•Purchase Price: $1,000,000
•Down Payment (20%): $200,000
•Mortgage Amount: $800,000
After the Change (Cap: $1.5 Million)
Now that the insured mortgage cap is raised to $1.5 million, buyers can qualify for insured mortgages with a lower down payment.
•First $500,000: Requires a 5% down payment = $25,000
•Next $500,000: Requires a 10% down payment = $50,000
•Total Down Payment: $25,000 + $50,000 = $75,000
•Mortgage Amount: $925,000
Savings: This reduces the down payment from $200,000 to $75,000, making homeownership more accessible for buyers in high-cost markets.
Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.
Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.
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