New Mortgage Rules in Canada: Lower Down Payments & Longer Amortizations for Homebuyers

Sabeena Bubber • February 4, 2025

In a significant move to address housing affordability, the Canadian government implemented new mortgage regulations that took effect on December 15, 2024. These reforms aim to make homeownership more accessible, particularly in high-priced markets.


Increased Insured Mortgage Cap

The cap for insured mortgages has been raised from $1 million to $1.5 million. This adjustment allows buyers to purchase homes valued up to $1.5 million with a down payment of less than 20%. Under the new rules, the minimum down payment structure is as follows:

  • 5% on the first $500,000 of the purchase price
  • 10% on the portion of the purchase price above $500,000, up to $1.5 million

For example, a home priced at $1.5 million would now require a minimum down payment of $125,000, compared to the previous requirement of $300,000.

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Extended Amortization Periods

The government has expanded eligibility for 30-year amortization periods to all first-time homebuyers and purchasers of new builds. Previously, this option was limited to first-time buyers purchasing newly constructed homes. The extended amortization reduces monthly mortgage payments, making homeownership more attainable.  Extended amortizations are not available to repeat homebuyers purchasing under this program.

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Implications for Homebuyers

These changes are particularly beneficial for buyers in high-cost markets like Vancouver and Toronto, where home prices often exceed $1 million. By lowering the down payment barrier and extending the repayment period, more Canadians can enter the housing market sooner.

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Broader Housing Strategy

These reforms are part of the federal government's comprehensive plan to build nearly 4 million new homes, aiming to alleviate the housing shortage and improve affordability. Additionally, the government has released blueprints for a Renters’ Bill of Rights and a Home Buyers’ Bill of Rights to protect consumers and promote transparency in the housing market.


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While these measures provide immediate relief for prospective homeowners, some experts caution about potential long-term effects, such as increased household debt and upward pressure on home prices. As the housing market adapts to these changes, continuous assessment will be essential to ensure sustainable growth and affordability.


In addition to the changes with CMHC rules, the federal government previously implemented some vehicles to make saving for down payment easier. 

  • Launched the Tax-Free First Home Savings Account, which allows Canadians to contribute up to $8,000 per year, and up to a lifetime limit of $40,000, towards their first downpayment. Tax-free in; tax-free out; and,
  • Enhanced the Home Buyers’ Plan limit from $35,000 to $60,000, in Budget 2024, to enable first-time homebuyers to use the tax benefits of Registered Retirement Savings Plan (RRSP) contributions to save up to $25,000 more for their downpayment. The Home Buyers’ Plan enables Canadians to withdraw from their RRSP to buy or build a home and can be combined with savings through the Tax-Free First Home Savings Account.



If you or someone you know is thinking about buying this year or in the next few years, I’m happy to assist with helping them plan towards their future. I have worked with many of my clients kids to help them make their dreams of homeownership a reality.

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