The Canadian housing market has seen major shifts in 2024. The Bank of Canada introduced significant interest rate cuts to help curb inflation and make homeownership more affordable. Additionally, the government increased first-time buyers’ RRSP withdrawal limits and introduced a five-year repayment pause for these withdrawals.

As the year wraps up, two more significant changes are set to take effect before the countdown to 2025 begins:

  • The insured mortgage cap will rise from $1 million to $1.5 million.
  • 30-year amortization periods will soon be available for first-time buyers and purchasers of newly built homes.

Insured Mortgage Cap Changes

Starting December 15, 2024, the insured mortgage price cap will increase—a long-overdue change given the steady rise in home prices since the cap was last updated in 2012.

Currently, to purchase a home in Canada, the required down payment varies based on the property’s price:

  • For homes under $500,000: A minimum 5% down payment is required.
  • For homes between $500,000 and $999,999: 5% on the first $500,000 and 10% on the portion above that.
  • For homes priced at $1 million or more: Mortgage insurance isn’t available, requiring a minimum 20% down payment.

This means that if you were looking to purchase a home over $1 million without at least $200,000 for a down payment, you’d have to compromise on the home you want.

With the newly announced changes, the maximum purchase price to qualify for mortgage insurance is increasing from $1 million to $1.5 million. In short, you can buy a home up to $1.5 million with less than a 20% down payment. Specifically, buyers will need:

  • 5% down payment for the first $500,000 of the purchase price.
  • 10% for the remaining amount, up to the new $1.5 million limit.

This increase is designed to align with today’s market realities, opening up more options for Canadians to qualify for insured mortgages with down payments under 20%. The hope is that this adjustment could unlock homeownership for more Canadians, especially in expensive urban areas.

Curious about how this change affects homebuying costs? Check out this Instagram video to see a comparison of purchasing a $1.1 million home before and after the new protocols take effect.

You can also experiment with different down payment amounts using our updated homebuying calculator.

30-Year Amortization Periods

Also starting December 15, 2024, the Canadian government is expanding access to 30-year mortgage amortizations. This change will make longer repayment periods available to:

  • First-time homebuyers.
  • Anyone purchasing newly built homes, including condos.

By spreading out the mortgage balance over a longer repayment period, buyers can:

  • Reduce monthly mortgage costs, making it easier to qualify for a mortgage.
  • Increase purchasing power, enabling buyers to afford more expensive homes.

This policy is also designed to stimulate the housing construction industry by incentivizing new builds, which may help address Canada’s housing shortage.

For many Canadians, longer amortization periods offer a lifeline. By lowering monthly payments, they reduce the carrying costs of owning a home, providing new opportunities that were previously out of reach.

New Mortgage Changes and Ourboro

Research consistently shows that homeownership transforms lives—not just for individual homeowners but for entire communities. At Ourboro, we believe in increasing access to homeownership and support any steps to bring this goal closer to Canadians.

However, these policy changes alone won’t meet the diverse needs of aspiring homeowners. That’s where Ourboro comes in.

Bridging the Gap

Our data shows that only 10% of Ourboro co-owners would have benefited from these upcoming changes and been able to purchase a home independently under the new rules. For the remaining 90%, the down payment gap would still be a barrier, highlighting the importance of Ourboro’s support. The ongoing housing crisis in Canada is complex, and no single solution will fix it. At Ourboro, we remain committed to bridging the down payment gap and helping Canadians achieve their dreams of homeownership.