Last week was a BIG week for the Mortgage and Real Estate Industry. So let me break it down!!
3 key points:
- CMHC Mortgage Cap raised to $1.5 million and extended amortization length
- Amortization Extension for First time homebuyers
- Cuts to the US Federal Reserve
Breakdown
CMHC Mortgage Cap raised to $1.5 million
The Government has capped the insured mortgage limit to $1.5 million from the previous $1 million. This allows buyers to now qualify for a mortgage with less than 20% down on homes with a value up to $1.5 million. So, if you were looking at that dream home that was priced at $1,125,000 and you have a down payment available of $135,000 you can now qualify for that property with an insured mortgage. The government has just announced the details of how down payments are broken down, a buyer will need 5% on the first $500,000 and 10% on the remaining $500,000 to $1.5. When looking at a property valued at $1.5 million buyers needed $300,000 now with these new rules the amount required has been brought down to $125,000. Not only was the insured mortgage cap raised, first time home buyers will have the ability to extend their amortization to 30 years rather than the previous 25. Adding on to the previous announcement of anyone purchasing a brand-new build as well! These changes will come into effect on December 15, 2024.
Amortization Extension for First Time Home-buyers
First time home buyers have been added to what was already announced 30-year amortization. It was announced previously that buyers purchasing a brand-new build will have the option to extend their amortization to 30 years from the previous 25. Well now the government has announced that they will also apply that to first time home buyers. Making it just a bit more affordable to get into this Market.
Cuts to the US Federal Reserve
The Federal Reserve has made a shocking move of trimming its rates by .50%. It is predicted that this allows the Bank of Canada to feel more comfortable to implement further rate cuts without decreasing our currency. If unemployment continues to increase both banks will likely expedite more rate cuts.
All this is good news for the home buyers out there. If you are looking to purchase that dream home, your current mortgage is up for renewal, or you just want to see what your options are right now. It is time to reach out and start the conversation. The time is now to get control of your biggest asset!
https://www.cnbc.com/2024/09/18/fed-cuts-rates-september-2024-.html