All the Latest Mortgage Rule Changes in One Place
Changes to our mortgage rules are opening new possibilities for Canadian homebuyers. Each change aims to improve affordability and make it easier for Canadians to buy or expand properties. Let’s break down what’s new!
April 16, 2024: RRSP Withdrawal Limit Increased to $60,000
The government made it even more beneficial for first-time homebuyers looking to use their RRSPs to help finance their new home. Previously, the Home Buyers’ Plan (HBP) allowed first-time buyers to withdraw up to $35,000 from their RRSPs to put towards purchasing a home. The withdrawal limit has been increased to $60,000 for individuals or $120,000 for couples, offering more flexibility to make your dream home a reality.
But that’s not all—there’s also a change to the repayment period. For first-time homebuyers using the RRSP Homebuyer’s Plan, you can delay the start of the 15-year repayment period. If you made your first withdrawal between January 1, 2022, and December 31, 2025, you could defer the start of your repayment period by three years. So, instead of starting to repay in the second year after your withdrawal, you can begin repayments three years later. For example, if you withdrew in 2024, your first repayment year would be 2029. This provides more breathing room and flexibility in your repayment schedule.
April 16, 2024: The $40,000 Canada Secondary Suite Loan Program
This program will provide eligible homeowners with access to up to $40,000 in funding for renovations or construction to add a legal secondary suite, such as a basement apartment or garden suite. This loan will be available through the Canada Mortgage and Housing Corporation (CMHC) and aims to make it easier for homeowners to add affordable housing units to their properties.
June 25, 2024 – Increased Inclusion Rate for Capital Gains
The Canadian government increased the rate at which capital gains are included in taxable income from 50% to 66%. This means that when you sell an asset like real estate that isn’t your principal residence and make a profit, 66% of that gain will be subject to taxation, rather than the previous 50%.
This change is effective for gains realized after or on June 25, 2024, and affects corporations and trusts and, for individuals, on capital gains realized in the year that exceed $250,000.
August 1, 2024: Extended 30-Year Amortization for First-Time Buyers of New Builds
If you’re a first-time buyer interested in a new-build home, you now have the option to extend your mortgage amortization to 30 years instead of the usual 25 years, which reduces your monthly payment. This extension is only available for insured mortgages that require less than a 20% down payment. The idea is to make monthly payments more manageable, helping first-time buyers get into their first home.
Note: The new 30-year mortgage option comes with a small surcharge from mortgage insurers like CMHC and Sagen. This surcharge accounts for the longer loan period and helps insurers continue supporting affordable housing. So, if you’re opting for the extended amortization, be aware of the additional cost—it’s there to keep these programs sustainable for everyone.
November 21, 2024: Stress Test Gone for Uninsured Renewal Switches
If you’re renewing an uninsured mortgage, there’s good news: you won’t have to re-qualify with a stress test if you switch lenders. OSFI removed this requirement to help homeowners like you find better deals at renewal without the extra hurdles. Insured mortgages already have a similar rule, so this change levels the playing field for uninsured borrowers. This change applies only to “straight switch” renewals, meaning borrowers must keep their amortization schedule and loan amount the same when switching to a new lender.
December 15, 2024: Big Changes for Insured Mortgages
For buyers, this date brings several key updates:
- Higher Insured Mortgage Cap: Insured mortgages can be used for homes up to $1.5M (previously $1M), making it easier to buy in pricier markets without needing a 20% down payment. Lower insured mortgage rates will now be available for those buying $1M+ properties.
- 30-Year Option for All First-Time and New-Build Buyers: Expanding on the August rule, all first-time buyers and all new-build buyers can now opt for a 30-year insured mortgage, giving you lower payments and a better chance at qualifying.
- 90% Refinancing: You can now refinance up to 90% of your home’s improved value (with a cap on homes worth up to $2M) for construction funds to achieve a secondary suite.
- 30-Year Amortization Option: You can also amortize your payments over 30 years with a small premium surcharge.
You can have up to 4 units on your property (check with local requirements) and you or a family member must live in one of the units. Renting the units is permissible as long as it’s not short-term like an Airbnb.
These updates give more Canadians access to lower insured rates, lower payments, and lower down payments, especially in markets where home prices are steep.
January 15, 2025: Insured Refinances for Building Secondary Suites
For the first time since 2016, insured refinances have returned for homeowners who want to add a secondary suite to their property. This measure is meant to encourage building rental units, help with housing shortages, and provide a potential income source. Here’s what this means:
Navigate New Mortgage Rules with Confidence: Trust Brampton’s Best Mortgage Broker
These new rules give Canadian homeowners more flexibility. Whether you’re a first-time buyer, planning a renovation, or looking to refinance, these changes make it easier to find a solution that works for you.
But with so many new rules piling up, it’s easy to feel overwhelmed. That’s why having a trusted mortgage expert like Rakhi Madan by your side can make all the difference. Known as Brampton’s Best Mortgage Broker, Rakhi has over 400 five-star Google reviews, proving her commitment to clear guidance and genuine care for her clients. She’ll take all the time you need to walk through each option, so you feel confident and comfortable with your choices. Put strength in your corner—let Rakhi help you turn these new mortgage rules into opportunities for a brighter financial future.
