30 Year Insured Mortgages Coming Back

Effective August 1, 2024, 30-year Insured mortgages will be available to first-time buyers purchasing new construction only. There’s no word yet on what the insurance premiums will be. Also, we don’t know what constitutes “new construction.” Our guess right now is that it’s any unsold/never-occupied, pre-construction or existing, residential home/townhouse/condo.

First-time buyers putting down 5% and going for a 30-year mortgage versus the current 25 year-mortgage will qualify for over 5% more home on average.

Also, to qualify for the same mortgage on a 30 year versus 25 year you will need roughly 5% less income than you currently do. The increase to buying power is small but this is meaningful in that it is loosening requirements rather than the constant tightening that has been happening over the last decade.

RRSP Home Buyers’ Plan Increases

The government is increasing the amount first-time buyers can withdraw from their RRSPs for a down payment from $35,000 to $60,000. Home Buyer Plan users who withdraw funds between Jan. 1, 2022 – Dec. 31, 2025, will also get five years instead of two before they need to start repayments.

Property Transfer Tax Exemption increases in BC

For many years the property transfer tax exemption for first time home buyers in BC has been capped at $500,000. This meant you needed to buy a property for less than $500,000 to avoid paying the transfer tax. Of course this number has been extremely outdated for many years given the significant appreciation in value of the market especially in the lower mainland of BC.

The government has recently increased the value of the exemption; however, whereas in the past it was simple in that there was a full exemption up to the $500,000 mark, now the increase in the exemption is only prorated and not on the full price.

Here are some details:

  • The threshold for the first-time homebuyers’ exemption is raised from $500,000 to $835,000.
  • The first $500,000 of the property’s fair market value is exempt from PTT.
  • The complete exemption gradually phases out between $835,000 and $860,000.

Enhanced Newly Built Home Exemption: Incentives for New Home Purchases:

  • The exemption for newly built homes increases from $750,000 to $1.1 million on the fair market value.
  • A phase-out range applies to homes valued between $1.1 million and $1.15 million.

Below is a chart from the Government of BC website with the exemption amounts for first time home buyers. Of course any exemptions you wish to claim, need to be fully verified with the lawyer/notary who will be completing your transactions. They will be responsible to give you advice in this area. We are only providing general information in this article.

If you need more information regarding mortgages or if you need any advice on your personal situation please contact our office at 604-556-3893 or email at alex.kotai@ymscanada.ca.

For more information on our mortgage products and your preferred Abbotsford Mortgage Broker please visit our website at www.ymscanada.ca.