In an effort to help first time home buyers get into the market as well as all other buyers that don’t have 20% down, the government just announced some exciting changes effective this December.

Here is a brief recap of the CMHC Insured mortgage rule changes coming over the next few months.

Changes to Down Payment Rules

Current down payment rules:

5% of the 1st $500K = $25,000

10% of the next $500K = $75,000

Total down payment = $75,000 (price must be under $ 1 million – max $999,999). For any prices over $1 million the down payment required is 20% down. Therefore, for a price of $1 million the down payment is $200,000 yet the down payment for a home that is $999,000 is only $75,000.

New down payment rules (effective December 14, 2024):

The price cap for an insured purchase will be $1.5 million.

Currently you are required to have a down payment of $300,000 on a $1.5 million purchase (20% down).

New minimum down payment requirements are as follows:

5% of the 1st $500K = $25,000

10% of the next $1million = $100,000 ** to be confirmed

Total down payment = $125,000 (price must be under $1.5 million – max $1,499,999).

This rule change can save buyers a potential $175,000 on the down payment if they are buying at the $1.5 million mark.

Changes to the Amortization on Insured Mortgages

Current Rules (as of August 2024 – 30 year insured mortgages for brand new homes only):

  • First-time buyers must have never purchased a home before, never occupied a principal residence they/their spouse/partner owned in the prior four years, or have recently experienced the breakdown of a marriage or common-law partnership.
  • Moreover, the property itself must be newly constructed and not previously occupied for residential purposes.
  • The mortgage must also be high-ratio insured, meaning the down payment is less than 20% of the purchase price.

New Rules (Effective Dec 15, 2024):

  • Expanding eligibility for 30 year mortgage amortizations on insured mortgages to all first-time homebuyers. First time home buyers can now get a 30 year insured mortgage on both new and used homes.
  • All buyers (2nd time buyers and beyond) of new builds only are eligible for a 30 year amortization on insured mortgages.


Friendly Reminder on First Home Savings Account (FHSA)

A FHSA combines some of the features of an RRSP and TFSA. Contributions will generally be tax-deductible, and when a qualifying withdrawal is made, the amount withdrawn is not-taxable.

To open a First Home Savings Account, you must be:

  • A Canadian resident
  • 18 years or older
  • A first-time home buyer

How does an FHSA work?

  • Annual contributions are capped at $8,000 up to a $40,000 lifetime contribution limit.
  • A maximum of $8,000 unused contribution room can carry forward to the following year.
  • The account can stay open for a maximum 15 years or until the end of the year you turn 71.

How is the FHSA different from the Home Buyers’ Plan?

  • With the current Home Buyers’ Plan, Canadians can withdraw up to $60,000 from their RRSP subject to eligibility and conditions. The funds must be paid to the RRSP over 15 years.
  • With a FHSA, eligible withdrawals do not need to be paid back.

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.