As we approach the end of 2024 and head into 2025, some significant changes are on the horizon for the Canadian mortgage market. Whether you’re a first-time homebuyer, a current homeowner, or considering refinancing, these updates may impact your decisions and financial plans.

Here’s a breakdown of the most important changes you need to know:

1. Changes to Stress Test Rules for Mortgage Transfers

Regulators are adjusting the mortgage stress test. Starting November 21st, 2024, borrowers will not be forced to qualify at their actual rate plus 2% when transferring their current mortgage to a new lender. This change will give borrowers more flexibility to find the best mortgage at renewal vs being stuck at a potentially higher rate because they fail to qualify with a new lender.

2. Decreased Down Payment Requirements

The minimum down payment for homes priced above $1 million is also changing. From December 15th 2024, prospective buyers can now put down less than 20%  for homes valued between $1 million and $1.5 million. The new minimum down payment will be 5% of the first $500,000 in purchase price and then 10% for the portion between $500,000 up to $1.5M.

3. Expanded eligibility for 30-year amortizations

Also beginning on December 15th, 2024, there will be an increase in the maximum amortization for all first-time homebuyers and all buyers of new builds (newly constructed homes) with less than 20% down payment from 25 years to 30 years. This will enhance borrowing power and lower payments giving buyers more options.

4. Better Access to Funds to Complete a Rental Unit

Ever considered adding a basement rental unit or a Garden/Laneway Suite? Starting on January 15th 2025, new rules are coming out to assist these types of projects. Increases to the maximum property value, the amount of the mortgage and best rates (insured) being some of the highlights of this program.

Stay Informed and Be Prepared

Navigating the ever-changing mortgage landscape can be challenging, but we’re committed to keeping you informed. Please feel free to contact me or schedule a consultation if you’re unsure if any of these changes may be applicable to you. We’re always happy to help!