Expanding eligibility for 30 year mortgage amortizations for all first-time homebuyers and all buyers of new builds
- This measure will apply to borrowers requiring high loan-to-value mortgage insurance in Canada and must satisfy the following requirements:
- The total loan to value is 80 percent or more; and,
- The borrower is either: (i) a first-time homebuyer; or (ii) purchasing a newly constructed home.
Definition of a first-time homebuyer, a borrower must meet one of the following criteria:
- The borrower has never purchased a home before;
- In the last 4 years, the borrower has not occupied a home as a principal place of residence that either they themselves or their current spouse or common-law partner owned; or,
- The borrower recently experienced the breakdown of a marriage or common-law partnership. On this point, the regulations will follow the approach that the Canada Revenue Agency has taken with respect to the Home Buyers’ Plan.
Definition of a newly constructed home
- To be considered a newly constructed home, the new home must not have been previously occupied for residential purposes. This requirement is not intended to exclude newly constructed condominiums where there has been an interim occupancy period.
Increasing the $1 million price cap for insured mortgages to $1.5 million
- This measure would apply to all borrowers requiring high loan-to-value mortgage insurance in Canada and must satisfy the following requirements:
- The total loan to value is 80 percent or more;
- The value of the eligible residential property against which the loan is secured must be less than $1.5 million; and,
The downpayment requirements for the loan are as follows:
- 5 percent on the portion of a purchase price up to $500,000.
- 10 percent on the portion of a purchase price between $500,000 and $1.5 million.
Effective date: These measures will be available for mortgage insurance applications that lenders submit to mortgage insurers on or after December 15, 2024.
These measures will only apply to high loan-to-value mortgages on properties occupied by the borrower or a close relative. All other eligibility criteria for government-guaranteed mortgage insurance will continue to apply.
**Information provided by the Mortgage Professionals Canada.**