Some would argue it’s long overdue, but as of December 15th some major changes came into effect from CMHC for financing homes. CHMC has raised it’s maximum insured mortgage limit to $1,500,000 from the previous $1,000,000. The new minimum down payment for a $1,500,000 home is now $125,000 (5% on the first $500,000 and 10% on the amount from $500,000-$1,500,000) compared to $300,000 prior to December 14th 2024. This is expected to have some major impact on the market, with my prediction will be that we start to see this momentum early spring - but as a team have already noticed an uptick in this price range.
Not only this but first time buyers can now purchase a home with a 30 year amortization instead of the pervious 25 year. This in the end will cost the consumer more interest, but will allow them to have a lower monthly payment for the same product or will increase their buying power.
For Example a family with an annual income of $200,000 could now qualify for $100,000 more in financing than they did before. This can be the difference of buying a home you love, or settling.
I expect this policy shift will impact the larger markets around first (Toronto, GTHA) before trickling into our market. I always explain the way pricing shifts from the large centres to our market as dropping a rock in a pond, that pricing wave pushing its way to smaller markets as the large market heats up. The hotter the market, or the bigger “the rock”, the fast and more intensely we feel the change here.
With mortgage rates dropping, and expected to continue to drop through 2025 I believe many buyers will try and enter the market, meaning pricing could start to climb again.
The increase to a $1.5 million insured mortgage cap and the option for 30-year amortizations are game-changers for first-time buyers. These changes provide more Canadians with the opportunity to buy a home they love without being sidelined by affordability issues.
If you’ve been waiting for the right time to buy, this could be your moment. Connect with a trusted mortgage professional or realtor today to explore your options!
