November 13, 2024
By
Jessica Perry

Important Updates for First-Time Homebuyers

As part of our commitment to keeping you informed about the latest developments in the financial landscape, we want to share some important updates specifically for first-time homebuyers:

Increasing the $1 Million Price Cap‍

  • The $1 million price cap for insured mortgages has increased to $1.5 million.
  • This will help more Canadians qualify for a mortgage with a down payment less than 20%.
  • For example, to purchase a $1 million home, you now only need to come up with a $75,000 down payment instead of $200,000.

Expanding Eligibility for 30-Year Mortgage Amortizations

  • The 30-year mortgage amortizations will apply to all first-time homebuyers and to all buyers of new builds.
  • At a 25-year amortization, a first time homebuyer who qualifies for a $750,000 purchase price can now qualify for an $810,000 purchase price.
  • This means that for every $100,000 of purchase price, your monthly payment is approximately $50 less.

In addition to traditional mortgage options, there are several effective strategies to help you save for your dream home. We believe these insights can empower you to make informed decisions as you embark on this exciting journey:

The First Home Savings Account

  • This account allows you to contribute up to $8,000 per year, and up to a lifetime limit of $40,000, towards your first down payment.
  • When you contribute to your FHSA, you can claim a tax deduction the same way you would with your RRSP.
  • Withdrawals from your FHSA are tax free, provided that you withdraw the money to help purchase a qualifying home.
  • Ask us for our First Home Savings Account brochure for more information.

RRSP Home Buyer’s Plan

  • First-time homebuyers can use the tax benefits of Registered Retirement Savings Plan (RRSP) contributions to save up to $60,000 towards their down payment. The Home Buyers’ Plan enables Canadians to withdraw from their RRSP to buy or build a home.
  • You have up to 15 years to repay to your RRSP the amounts you withdrew.
  • Ask us for our Home Buyer’s Plan FAQ for more information.

Remember, we are here to support you with all your financial needs, and we look forward to assisting you every step of the way.

If you have any questions or need further information, please don't hesitate to reach out.