December 15th Changes in Mortgage Rules

Starting December 15th, the maximum loan amounts increased for borrowers of High Ratio Mortgages (<20% down payment). This is great news, especially for those in higher-priced markets where the current loan limits may have made it more difficult to secure enough financing. Here is a summary of the changes:

#1 Increase in the $1 Million Price Cap to $1.5 Million

This change applies to all applicants who require high-ratio mortgage insurance (required when the down payment is less than 20% and the loan-to-value (LTV) ratio is greater than 80%). The following conditions must be met:

The value of the property securing the loan must be less than $1.5 million.

Down payment requirements:5% on the portion of the purchase price up to $500,000.10% on the portion of the purchase price between $500,000 and $1.5 million.

#2 Eligibility for 30-Year Mortgage Amortizations

This measure applies to high-ratio mortgage insurance applicants who are:

First-time homebuyers purchasing either a newly constructed or existing home, or All buyers purchasing a newly constructed home.

 Other Parameters

Effective Date: These changes apply to high-ratio mortgage insurance applications submitted on or after December 15, 2024, including resubmitted applications. Occupancy: These measures apply only to high-ratio mortgages for properties that will be occupied by the borrower or a close relative (i.e., someone related to the borrower by marriage, common-law partnership, or any legal parent-child relationship on a rent-free basis). A rate premium surcharge of 0.20% will apply to insured mortgages with amortizations exceeding 25 years. 

First-Time Homebuyer Requirement:

At least one borrower must be a first-time homebuyer, meeting one of the following criteria:

-The borrower has never owned a home.

-The borrower has not occupied a home as their primary residence, nor has their current spouse or common-law partner, in the past 4 years.

-The borrower has recently experienced the breakdown of a marriage or common-law partnership.