An insured mortgage refers to a mortgage where customers who make a down payment of less than 20% pay an insurance premium. This is a policy aimed at minimizing the bank’s risk due to the smaller down payment. With an insured mortgage, the maximum price of a home that can be purchased is $1 million, and the maximum repayment period available is 25 years.
However, a new policy regarding insured mortgages in Canada will be introduced starting December 15 this year. The goal of this revision is to provide more benefits and expand the options for homebuyers, particularly first-time homebuyers.
The maximum home price that can be purchased through an insured mortgage will increase from the previous $1 million to $1.5 million. This measure is intended to allow buyers in the high-end housing market to also benefit.
First-time homebuyers will be able to choose a repayment period of up to 30 years when purchasing not only newly built homes but also existing homes, helping to reduce the financial burden with lower monthly payments.
Even for non-first-time homebuyers, when purchasing newly built homes, they will be eligible for a 30-year repayment period, which allows for more flexible long-term financial planning.
These changes are expected to provide greater liquidity and stability in the housing market, particularly positively impacting first-time homebuyers and the new home market.
