Dwayne Kavanagh
Mortgage Agent Level 2 - M22004377
Tel: 416-937-5991 | Cell: 416-937-5991 | Fax: 905-574-7384
Are you a first-time homebuyer struggling to qualify for a mortgage? Or maybe you're looking for a way to make homeownership more affordable? Great news! The upcoming December 15th mortgage rule changes are here to help.
In this article, we’ll explore how these changes can make buying your dream home a reality, even if you’ve faced challenges before. Plus, I’ll use a real-life example to show you exactly how these updates can turn a "NO DEAL" into an APPROVED mortgage.
Here’s a quick overview of the major updates:
Increased Insured Mortgage Cap
The current insured mortgage cap of $1 million is being raised to $1.5 million, making it easier for buyers in higher-priced markets to qualify for an insured mortgage.
30-Year Amortization Options
Extended amortization periods are now available, allowing you to lower your monthly payments and make homeownership more manageable.
No Stress Test for Mortgage Renewals
Switching lenders at renewal just got simpler. With the elimination of the stress test for renewals, you’ll have more flexibility to find better rates and terms.
For many first-time homebuyers and new build purchasers, these updates are significant. Here’s why:
Higher Insured Mortgage Cap:
Buyers in competitive markets can now access insured mortgage products even with higher property prices, removing a major hurdle.
Lower Monthly Payments:
A 30-year amortization reduces your monthly mortgage payments, freeing up cash flow for other priorities.
Simplified Renewals:
Eliminating the stress test when switching lenders at renewal ensures you’re not locked into unfavorable terms, giving you more power as a borrower.
Let’s say you’re buying a home for $1.4 million with a 10% down payment. Before December 15th, the insured mortgage cap would disqualify you. But under the new rules, the increased cap allows your application to proceed.
Additionally, with a 30-year amortization, your monthly payments drop significantly, making the mortgage more affordable. Using my mortgage app, we can break down these numbers step-by-step to see how they affect your GDS (Gross Debt Service) and TDS (Total Debt Service) ratios—key metrics for qualifying.
Understanding your GDS and TDS ratios is critical when applying for a mortgage:
The new rules make it easier to meet these requirements, especially with the lower payments from a 30-year amortization.
If you’re curious how these changes could affect your homebuying journey, let’s connect! Download my mortgage app or book a quick call to explore your scenario. We’ll review the numbers together and see how you can take advantage of these updates to get closer to your dream home.
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The information provided in this blog is for educational purposes only and does not constitute financial advice. Mortgage rules and market conditions can change, so always verify details with your lender or a trusted professional. I am licensed in Ontario and not soliciting clients outside of this region.