Mortgage Rule Changes

Tracy Head • November 16, 2024

Things are picking up. I have seen a significant increase in the number of purchases I am working on with clients. I’ve done an informal poll of some of my realtor and broker friends and we are all seeing the same increase in activity.


This week I attended a learning session about the recent and upcoming changes to mortgage rules. This year it has felt like changes have been rolled out so often that its hard to stay on top of new policies.


I thought it might be good to go over some of these changes as they will benefit many homeowners and homebuyers. Please note that this is a quick explanation and you may have questions or need clarification on some of what follows so please make sure you speak with your mortgage professional before moving forward with a purchase.


In the order the changes were discussed in our session, here is a high-level overview for you.


Effective August 1, 2024 first-time home buyers (FTHB) were able to purchase a newly built home using a thirty year amortization with a minimum down payment. Prior to this change the maximum amortization allowed for buyers with less than twenty percent down was twenty-five years.


Key to note here is that the definition of a FTHB for purchasing homes is based on the CRA explanation of home buyers starting out or starting over; this includes buyers who have not owned their primary residence (nor lived in a home owned by their significant other) for the last four years. It also includes buyers who are recently separated or divorced.


Also key to note is that only one of the borrowers must qualify as a FTHB for these rules to apply.


For the purposes of Land Transfer Tax in BC, even if clients are considered FTHB under mortgage rules, they will still have to pay Land Transfer Tax if they have ever owned a home anywhere in the world.


There is a small increase to the insurance premium (,2 per cent) if borrowers elect to use the thirty year amortization. 

Effective December 15, 2024 the price cap for insured mortgages will be increased from $1,000,000 to $1,500,000. Clients will be able to purchase a home up to this price with a minimum down payment of five per cent of the first $500,000 and ten per cent of any balance over that and up to $1,500,000. For the full $1,500,000 the minimum down payment will now be $125,000 as compared to the previous minimum down payment of $300,000.


Trying to come up with the required twenty per cent down payment has been a barrier for many borrowers. 

The changes coming into effect December 15 also include the ability for repeat buyers to new builds with a thirty year amortization. 


As well, all FTHB will be eligible to qualify based on a thirty year amortization regardless of whether they are buying a newly built home or an existing home.


For these guidelines to apply mortgage applications must be submitted AFTER December 15.

The final change I’m going to touch on today rolls out effective January 15, 2025.


Existing homeowners will be able to refinance their homes up to ninety per cent of the as-improved value of their home if they are pulling equity to create a secondary suite in their home using a thirty year amortization.

What does “as-improved value” mean?


With these applications we will need to order an appraisal which shows the current value of the home as well as the value of the home once the proposed work is completed. 


Current rules limit refinances to eighty per cent of the value of the home so I see this as a significant benefit for clients who are maybe newer to the housing market and can really use the income from a secondary suite.


There are of course requirements for this program including:

  • Either the borrower or close family member must live in one unit of the property
  • You can add more than one unit to the home (up to a total of four) providing zoning allows for this
  • Units must be completely self-contained
  • Financing limit cannot exceed actual costs of the work


Is your head spinning yet? Mine certainly is, trying to keep all of these changes straight.

Many lenders are still determining their own policies as to how they choose to incorporate these rule changes into the mortgages they offer. It is important to speak with a mortgage professional to see how these changes may impact your borrowing power.

As I mentioned we are already seeing a definite increase in purchase activity. It will very interesting to see if there is a flurry of activity following the implementation of the December 15 changes as well.

Tracy Head

Mortgage Broker

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Navigating Mortgage Renewals in Uncertain Times

By Tracy Head • April 2, 2026
If you’re one of the many Canadians with a mortgage renewal coming up this year, you’ve likely felt a bit of unease reading the headlines. Interest rates, inflation, global tensions—it can feel like a lot. After more than two decades in this industry, I can tell you this: uncertainty is nothing new in real estate or lending. What matters most is how you respond to it. The good news? You have more control than you might think. Let’s walk through a few practical, level-headed strategies to help you approach your renewal with confidence—rather than stress. 1. Start Early—Earlier Than You Think One of the biggest mistakes I see homeowners make is waiting for their lender’s renewal letter to arrive. By then, you’re already on their timeline—not yours. I recommend starting the conversation at least 4–6 months before your maturity date. This gives you time to explore options, secure a rate hold if available, and avoid being rushed into a decision. 2. Don’t Just Sign the Renewal Offer It may be convenient to simply sign and send back your lender’s offer—but convenience can come at a cost. In many cases, lenders don’t present their most competitive rates in renewal letters. Think of your mortgage like any other major expense: it deserves a second look. Even a small difference in rate can translate into thousands of dollars over your next term. 3. Consider Your Risk Tolerance—Not Just the Rate In uncertain times, it’s tempting to try to “time the market.” Fixed or variable? Short term or long term? These are important questions—but they shouldn’t be driven by headlines alone. Instead, ask yourself: Do I value stability and predictable payments? Am I comfortable with some fluctuation if it means potential savings? How long do I realistically plan to stay in this home? There’s no universal “best” option—only the best fit for your comfort level and financial goals. 4. Explore Shorter Terms as a Bridge Strategy With so much unpredictability in the global landscape, some homeowners are opting for shorter-term mortgages (1–3 years) as a way to “wait and see.” This can be a smart approach if you believe rates may stabilize or improve, but it’s important to weigh this against current pricing and your tolerance for future changes. Think of it less as gambling on rates—and more as maintaining flexibility. 5. Use This Opportunity to Restructure A renewal isn’t just about accepting a new rate—it’s a chance to revisit your overall strategy. You might consider: Adjusting your amortization to improve cash flow or accelerate payoff Consolidating higher-interest debt into your mortgage Adding prepayment privileges to give yourself more flexibility This is your moment to align your mortgage with your current life—not the one you had five years ago. 6. Build a Small Buffer Into Your Budget Even if you secure a great rate, it’s wise to prepare for slightly higher payments—especially if you’re coming off a historically low rate. Creating a bit of breathing room in your monthly budget can reduce stress and give you options down the road. If rates drop, you’re ahead. If they rise, you’re prepared. 7. Lean on Professional Advice The mortgage landscape has become more complex, not less. Policies shift, lender appetites change, and new products emerge. A good mortgage broker doesn’t just shop rates—they help you interpret the landscape and make decisions that suit your long-term financial well-being. At the end of the day, uncertainty doesn’t have to mean instability. With the right preparation and a thoughtful approach, your renewal can be an opportunity—not a setback. If there’s one takeaway I’d leave you with, it’s this: stay proactive, stay informed, and don’t be afraid to ask questions. You’re not just renewing a mortgage—you’re shaping your financial future.  And that’s worth doing well.

Purchase Plus Improvements

By Tracy Head • March 19, 2026
Hammer, Nails… and a Mortgage That Sees Potential Over the years I’ve noticed a pattern: buyers fall into two camps. The “this house is perfect” crowd… and the “this could be perfect if we just fix a few things” crowd. Today, we’re talking about the second group—and one of the most underused tools in the Canadian mortgage world: the purchase plus improvements mortgage. What Is It (and Why Should You Care)? A purchase plus improvements mortgage lets you roll renovation costs into your mortgage at the time of purchase. Instead of draining your savings—or worse, putting renovations on a high-interest line of credit—you finance those upgrades at your mortgage rate. In plain English: you buy the house and fix it up, all in one tidy package. You get to enjoy the renovations while you live in your home, rather than scrambling to renovate or update when you are getting ready to sell. Lenders like this because you're increasing the value of the home. You should like it because you're borrowing at (usually) the cheapest rate you'll ever get. Let’s say you’ve found a home priced at $700,000. It’s solid—but a little tired. You want to: Upgrade a dated bathroom Replace an aging furnace Put on a new roof Total improvement budget: $40,000 With a purchase plus improvements mortgage, your financing is based on the “as-improved” value, meaning: Purchase price: $700,000 Improvements: $40,000 Total financed value: $740,000 Because the purchase price exceeds $500,000, the minimum down payment in Canada is not 5% flat. It’s calculated as: 5% on the first $500,000 = $25,000 10% on the remaining $240,000 = $20,000 Minimum required down payment: $49,000 Mortgage Before Insurance Total value: $740,000 Down payment: $49,000 Base mortgage: $691,000 Adding the CMHC Insurance Premium Because your down payment is under 20%, mortgage default insurance applies. At this loan-to-value (roughly 93.4%), the CMHC premium is 4%. CMHC premium: $691,000 × 4% ≈ $27,640 This premium is typically added to the mortgage, not paid upfront. Total mortgage after insurance: ≈ $712,421 What Does That Payment Look Like? Now let’s plug that into real numbers: Mortgage: $712,421 Rate: 3.99% Amortization: 25 years Estimated monthly payment: ≈ $3,750–$3,760/month (call it $3,755/month for coffee-shop accuracy). Why This Still Makes Sense Here’s where people sometimes hesitate: “Wait—I’m paying insurance and financing renovations?” Yes. And in most cases, it still works in your favour. Because: You’re financing renovations at 3.99%, not 8–10%+ You’re improving the home’s value immediately You’re avoiding the markup baked into fully renovated homes In other words, you’re not just spending money—you’re strategically improving the value of your new home. How It Actually Works Behind the Scenes Here’s the part most buyers don’t realize: You submit quotes for the renovations upfront The lender approves the total (purchase + improvements) The purchase closes as usual The renovation funds are held back by your lawyer You complete the work Funds are released once the work is verified It’s a bit of paperwork—but compared to juggling contractors and separate financing? It’s a win. Why I Recommend This More Often Than You’d Think After years in this business, I can tell you this - the “perfect home” usually comes with a premium price tag. But the “almost perfect” home? That’s where the opportunity is. With a purchase plus improvements mortgage, you can sometimes: Buy in a better neighborhood Customize the home to your taste Avoid bidding wars on fully renovated properties Finance upgrades at mortgage rates (instead of 8–10%+ elsewhere) If you’re considering this route, here’s my advice: Get detailed quotes (not ballpark guesses) Plan for a buffer—renovations love surprises Work with a broker early (this is not a last-minute add-on) And most importantly: don’t be scared of a home that needs work. Some of the best purchases I’ve seen over the years started with the phrase, “Well… it’s not perfect, but…” Final Thought A purchase plus improvements mortgage isn’t just financing—it’s strategy. It’s the difference between settling for someone else’s vision… and building your own, from day one.  And in a market like Canada’s, that kind of flexibility isn’t just nice to have—it’s powerful.