These are the Big Changes in the Mortgage Industry: What You Need to Know This Winter

Hey everyone! I'm here with Daryl French, and we’re excited to share some significant updates in the mortgage industry. These changes are designed to help first-time buyers, increase affordability, and make renewals more competitive. Here’s what’s new and why it matters:

1. Extended Amortization for First-Time Buyers

The big news this fall is the extension of amortization periods to 30 years for first-time buyers. This change increases buying power by spreading out payments over a longer period, making monthly costs more manageable. While we would have loved to see the government reduce the stress test rate by even half a percent, this is still a positive step forward. Increased affordability means more opportunities for first-time buyers to enter the market.

2. Lower Down Payments on Homes Up to $1.5 Million

Previously, homes priced over $1 million required a 20% down payment. Now, that threshold has been raised to $1.5 million. This means you can purchase a home valued at $1.5 million with a down payment of just $125,000 instead of $200,000. While qualifying for this will require an income of about $320,000, it opens doors for many buyers in markets like the Okanagan, where homes often sit in the $1 to $1.2 million range. This change can make single-family homes more accessible for many families.

3. Stress Test Eliminated for Conventional Mortgage Renewals

Perhaps the most impactful change is related to mortgage renewals. Since 2018, borrowers looking to shop around at renewal had to requalify under a stress test (2% above the current rate), while those sticking with their existing lender did not. This lack of competition often forced homeowners to accept higher renewal rates.

Now, for borrowers with conventional mortgages (20% equity or more), this requirement has been removed. Shopping around for better rates is once again possible, which encourages competition among lenders and benefits consumers. Unfortunately, this change doesn’t yet apply to high-ratio mortgages (those with 5% or 10% down payments). Hopefully, that adjustment will follow, but for now, it’s a significant step in the right direction.

What Does This Mean for You?

If you’re a first-time buyer, looking to buy in the $1 to $1.5 million range, or renewing your mortgage, these changes could have a big impact. Whether it’s increased buying power, reduced down payment requirements, or more options at renewal, there’s plenty of opportunity to take advantage of these updates.

If you’re thinking about renewing your mortgage or want to explore your options, feel free to reach out to Daryl at 250-470-8843. He’ll be happy to guide you through the details and help you make the most of these changes.

The mortgage landscape is shifting, and these updates are a step forward for buyers and homeowners alike. Stay informed, and don’t hesitate to seek expert advice to make the best decisions for your financial future!