New Mortgage Rules in Ontario: What You Need to Know

The Ontario real estate market is buzzing with the recent announcement of new mortgage rules aimed at making homeownership more accessible and affordable for Canadians. Here are the key changes and what they mean for homebuyers and investors:

Extended Mortgage Amortization Periods

Previously, 30-year mortgage amortizations were limited to specific groups. Now, all first-time homebuyers and buyers of new builds can take advantage of this extended period, reducing monthly payments and making homeownership more attainable.

Increased Price Cap for Insured Mortgages

The price cap for insured mortgages has been raised from $1 million to $1.5 million. This change means lower down payments for homes valued up to $1.5 million, making it easier for buyers to enter the market1.

Lower Minimum Down Payments

With the new rules, the minimum down payment required for homes valued up to $1.5 million has been reduced. Buyers now need to put down 5% on the first $500,000 and 10% on the portion between $500,000 and $1.5 million. This adjustment significantly lowers the upfront cost for homebuyers

No Stress Test for Renewals

One of the most significant changes is that insured mortgage holders can now switch lenders at renewal without undergoing another mortgage stress test. This increases competition among lenders and allows homeowners to secure better rates without the added hurdle of requalification

Refinancing for Home Improvements

Homeowners with insured mortgages can now refinance up to $2 million to fund the construction of secondary dwelling units, such as laneway houses or basement apartments. This opens up new opportunities for homeowners to increase their property's value and generate rental income.

Conclusion

These new mortgage rules are designed to make homeownership more accessible and affordable, especially for younger generations and first-time buyers. As a real estate agent, it's essential to stay informed about these changes and help your clients navigate the evolving market.