Expansion of 30 Year Amortization and Increased Insured Mortgage Cap October 7, 2024

The federal government recently announced significant changes to make housing more affordable, giving more people a better chance of getting into the housing market. These mortgage changes, set to take effect on December 15, 2024, will allow buyers at City Gardens to have lower monthly payments with longer amortization periods, helping to ease the burden of today’s high interest rates.

We spoke to expert mortgage broker Lucas Mathieu to learn about how these changes will make homeownership easier, especially for those interested in making Trillium their new home.

As Mathieu explained, one of the big changes coming soon is the increased price cap for insured mortgages, which will be going from $1 million to $1.5 million.

“This means buyers will be able to put less than 20% down payment on a house, allowing them to enter the market,” he said. “For instance, people can now purchase a $1.5-million home with just a $125,000 down payment, a significant reduction from the current $300,000 requirement for uninsured borrowers.”

Another key change is the expansion of 30-year amortization periods for insured mortgages.

“Before, the maximum amortization on an insured mortgage was 25 years, now that will be increased to 30 years,” noted Mathieu. “By obtaining a longer amortization period, your monthly payment will significantly decrease and relieve some of that financial burden.”

In addition, while buyers might pay more interest over time, as Mathieu explained, it is estimated that going from a 25-year amortization to a 30 year one on an insured mortgage will increase purchasers’ borrowing power by 10%.

“Although homebuyers will initially pay more interest over time, lenders will still offer pre-payment privileges,” he shared. “This means they can still take the 30-year amortization, get a cheaper monthly payment, but still utilize these privileges to pay down their mortgage principal faster and as a result, earn some of that interest back over time.”

By taking advantage of this expansion, homebuyers can substantially reduce their baseline mortgage payments, potentially freeing up funds to use toward their mortgage principal by the end of the year.

“This strategy allows purchasers to lower their amortization while saving on interest,” he added.

These changes are especially significant for City Gardens, as they apply to both first-time homebuyers and those purchasing new builds.

“Trillium buyers who might not be first-time homeowners, including those looking into downsizing, will still be able to put less than 20% down and get a 30-year amortization given that the property is new,” explained Mathieu, inviting those interested to stay up to date on all the details as more information becomes available over the next two months.

Explore the potential of Trillium and see how these new mortgage benefits can open doors to homeownership at City Gardens. For more information and to stay updated, contact us today and discover your path to a new home!


Author: Mandy Curtis Post Date: October 7, 2024

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