This fall, the federal government announced some significant changes to mortgage rules, aimed at helping Canadians buy a home and have more options while renewing. Here are the highlights:

First-Time Homebuyers are now able to get up to a 30 year amortization on purchases with less than 20% down. This lowers monthly payments – making them more manageable – plus increases buyers’ maximum purchase price. *Don’t forget that if you haven’t owned a home in the past 5 years, or have gone through a marital breakdown, you re-qualify as a first-time homebuyer!

Plus, anyone can now take advantage of the 30 year amortization on insured purchases (meaning you put less than 20% down) as long as you are buying new-build properties.

Here’s an example of how this helps affordability: An $800,000 mortgage at 4.09% over 30 years would have a monthly payment of approx. $3,845. By comparison, a 25 year amortization with the same mortgage would cost around $4,250 per month – an difference of $405 each month!

The feds also raised the cap on insured purchases, from $1 million to $1.5 million, helping Albertans qualify for the home they want with less down payment! The minimum down payment rules will follow and will now be 5% on the first $500,000 and then 10% on any amount between $500,000 and $1.5 million. Thus, the minimum down payment on a $1.2 million home would drop from $240,000 under the current rules to just $95,000 under the new rules.

Finally, all mortgages do not have to be re-qualified under the stress test rules at renewal! This gives borrowers more ability to switch lenders when renewing to find a better rate and product.

Reach out to your favourite mortgage broker if you have any questions on these new rules and how they may affect you!