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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Not all lenders are created equal

By Tracy Head • April 21, 2025
Not all lenders are created equal Just as no two clients are the same, not all lenders are created equal. For the majority of clients getting the best interest rate is their primary concern. For me as a broker it is as important to find a lender that provides a smooth process from start to finish and excellent customer service once a mortgage has finalized. What do I mean by this? When new lenders pop into the mortgage market they often offer low interest rates or better compensation to encourage mortgage brokers to send files their way. Sometimes these new lenders are amazing, and sometimes not as much. Once in a while more established lenders will offer brilliant rates in order to increase the number of mortgages they have on the go. We see lenders float in and out of the competitive rate market based on how much money they have available to lend at any given time. While this can be great for clients, it can also be a nightmare. If a lender does offer rates much lower than other lenders they end up flooded with applications. They may or may not have the staff / staff with expertise to handle larger volumes and increased time pressures. If we are working on a refinance with flexible dates this isn’t necessarily a problem. If we are working on a purchase application with deadlines this can become stressful for all involved. On top of that lenders have different processes for handling the legal paperwork that goes to your lawyer’s office. Some lenders handle everything in-house and have very responsive teams to handle getting the documents to your lawyer and addressing any changes that need to be made. Other lenders hire third-party service providers to produce their documents and this adds an extra day or two to the process. As a broker I try to learn about my clients’ longer term plans and find the right fit lender-wise. I look at lenders’ policies for portability, pre-payment options, flexibility with respect to their guidelines, broker support, and equally as important client service experience after the mortgage finalizes. Does the lender have a portal? Will they allow me as a broker to help my clients or do they require clients to work with them directly for any changes? We sent applications to two newer lenders over the last month because they had fantastic rate specials available. Both files ended up being very stressful as we were down to the wire waiting for mortgage instructions to be sent to the clients’ respective lawyers. I prefer not to have to deal with last-minute stress on my files.  Rate is of course incredibly important to your long-term financial health. In my mind a smooth process before and after your purchase or refinance is also important. There are many considerations that go into choosing the right package for our clients. My recommendation one day may change the next depending on both your situation and what I am seeing behind the scenes with various lenders. I hope you had a beautiful Easter weekend!!

Home Inspection

By Tracy Head • March 28, 2025
In an ideal situation I have some time upfront to work with clients on their pre-approval. I like to go over what to expect in terms of both the process and what to expect in terms of closing costs when they have an accepted offer on a home. We usually talk about potential expenses like property transfer tax, an appraisal, a home inspection, home insurance, and legal fees. This time of year we also talk about upcoming property taxes for anything they are purchasing before July 1st. I think human nature is that we want to minimize our expenses and make sure we are getting the most bang for our buck. There are a few areas of cross-over where I anticipate the clients’ realtor will be speaking to them about items like the requirement to organize home insurance and the importance of a home inspection. In practice I think most realtors encourage their buyers to move forward with a home inspection because they want to ensure clients are not buying any surprises that will create headaches down the road. Sometimes clients are buying privately and are not represented. In those cases I always urge them to include a home inspection as one of their conditions. I have had clients question the need for a home inspection, particularly if they are buying a condo or a new build. Two recent examples have popped up that reinforce for me the importance of a home inspection: - We are working with a lovely first-time home buyer in the lower mainland. Her budget isn’t huge so she has been waiting and watching for the right property to come up, and for her offer to be the one chosen. The stars aligned for her last week. Her financing was approved and all of the financing conditions were signed off by the lender. We were doing a happy dance for her and had a rude awakening the day she did her home inspection. The home inspector found an ongoing leak in the kitchen that has created a soft wall which is indicative of a bigger problem. On a surface level the kitchen is beautiful and relatively recently updated. As a first-time home buyer with no family nearby our client was thrilled by the aesthetics of this condo, then devastated by the potentially expensive work needed to repair / rectify the damage. - The second situation really caught us by surprise. We have clients on Vancouver Island who have an accepted offer on a brand-new home that has never been lived in. They did choose to invest in a home inspection and we are so glad they did. It turns out that somehow some of the larger windows were installed incorrectly and this has created damage to the windows and a leak in one corner. Again, with a new build the temptation would often be to skip the home inspection. Yes, any issues with this home will be covered by warranty. Having the home inspection done and being aware of the issues upfront gives them a lot more power with respect to having these defects repaired quickly. Now that I’ve driven that point home, its important to know that not all home inspectors are created equal. Do your due diligence – look at reviews, look at the home inspector’s qualifications and length of time / experience doing home inspections. Going with the cheapest option is not always the best option.  Buying a home is the biggest investment you will likely make. Trying to save a few hundred dollars upfront may end up costing you thousands of dollars and sleepless nights down the road. Save yourself the pain and aggravation of hidden issues in your home.