Big News for Homebuyers! Default Insurance Rules Are Changing!

Get ready for some exciting changes to mortgage default insurance rules, effective December 15th, 2024! These updates are designed to make homeownership more accessible for a wider range of buyers.

Higher Price Cap for Insured Mortgages

The maximum price for homes eligible for insured mortgages is increasing from 1 million to 1.5 million. This means more buyers can access mortgages with default insurance, even for higher-priced properties.

Here’s the breakdown:

• Who it applies to: Buyers requiring high-ratio mortgage default insurance (down payment less than 20%, loan-to-value greater than 80%).
• Requirements: The property value must be under $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.

Longer Amortization for First-Time Buyers and New Builds

Now, all first-time homebuyers and buyers of newly constructed homes can qualify for 30-year mortgage amortizations, even with high-ratio mortgage insurance.

Here’s who qualifies:

• First-time homebuyers:
  • Never purchased a home before.
  • Haven’t owned a home as their primary residence in the past 4 years.
  • Recently experienced a marriage or common-law partnership breakdown.
• Buyers of new builds: Purchasing a newly constructed home.

These changes are great news for anyone dreaming of homeownership!

With a higher price cap and longer amortization options, more people can achieve their dream of owning a home.

Stay tuned for more updates as we get closer to the December 15th implementation date!