Mortgage Insurance Rule Change Details

There are two new rule changes:

1. Expanding the eligibility for 30 year amortizations for first time home buyers
2. Increasing the $1M insured cap to $1.5M

First off, neither of these are in effect yet. The mortgage insurance application must be submitted on or after December 15, 2024.

This means that in order to qualify for 30 years amortization or purchase up to $1.5M on insured mortgages, the application (mortgage application) can’t start before December 15th. This means that your clients can’t really purchase for these before then as well. 

To be considered a first time home buyer, a borrower must meet one of the following conditions:

• Borrower has never purchased a home before
• In the last 4 years, the borrower has not occupied a home they own (or their spouse owns) as a principal residence. 
• The borrower recently experienced a breakdown of a marriage or common-law partnership.

To be able to purchase up to $1.5M for insured mortgages:

• There must be less than 20% down payment.
• The property must be valued at less than $1.5M (up to $1,499,999).
• The down payment must be at least 5% on the first $500,000 and 10% thereafter, up to $1.499,999.
  Technically, a $1,499,999 purchase would have a minimum down payment of $125,000 ($25K for the first $500,000 and $100,000 from $500,000 to $1,500,000).

I think this is very welcome, especially in expensive areas such as the lower mainland.As an aside, In order to qualify for a $1,499,999 property with the minimum down payment, a family would have to have a combined income of approximately $295,000.