New Mortgage Rules and CMHC Updates: A Guide for First-Time Buyers

Joel Olson • September 17, 2024

In Budget 2024, the Canadian government introduced significant changes to help first-time homebuyers by extending mortgage amortization periods up to 30 years for those purchasing newly built homes. Effective August 1, 2024, this change will help ease monthly mortgage payments, making homeownership more accessible.


Key Eligibility Criteria for First-Time Buyers:

  • First-Time Buyer Status: At least one borrower must qualify as a first-time homebuyer, meaning they have either never owned a home, haven't lived in a home they owned in the past four years, or recently went through a marriage breakdown.
  • Newly Built Homes: The property must be a newly constructed home that has never been occupied.


These extended mortgages will only apply to high-ratio mortgages (loans covering more than 80% of the home’s purchase price) and are limited to owner-occupied properties. All other mortgage insurance eligibility criteria remain unchanged.


CMHC’s New Amortization Rules for Market MLI and MLI Select Programs

The Canada Mortgage and Housing Corporation (CMHC) has also introduced changes. As of June 19, 2024, the maximum amortization period for new construction market projects will increase from 40 years to 50 years. Additionally, the maximum period for re-amortization (for default management) will extend to 55 years for loans under the MLI Select Program.


These changes aim to encourage the construction of more rental housing units while managing housing affordability. CMHC’s modifications also include updates to energy efficiency criteria, lowering the maximum points from 100 to 50 based on energy efficiency, which means developers may need to shift focus toward affordable units to receive maximum benefits.


Changes to "Use of Funds" and Refinancing

CMHC has lifted restrictions on how refinanced funds can be used, reverting to pre-2020 rules. This allows non-approved lenders to offer bridge loans, creating more flexibility in financing options.


Environmental Site Contamination Policies

In response to industry practices, CMHC is reviewing its environmental site contamination policies. For now, projects with known site contamination will be accepted under conditional approval, pending a contamination-free site confirmation.


Why These Changes Matter

For first-time homebuyers, the ability to spread mortgage payments over 30 years is a welcome relief in today’s housing market, particularly for newly built homes. These changes are designed to improve housing affordability and supply, especially for younger Canadians looking to purchase their first home.


Meanwhile, CMHC’s new rules around extended amortizations and energy efficiency adjustments will have a significant impact on developers, especially those focused on building rental properties or using energy-efficient technologies in their projects.

If you're considering buying a home or developing a property, these changes could impact your strategy. To fully understand how these updates may apply to your situation, it's important to consult with a mortgage expert who can offer personalized advice.


Want to know how these changes could affect your home buying or property development plans? Book a call with a mortgage expert today to explore your options!


Joel Olson
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3 Questions To Ask Yourself Before Listing Your Home!

By Joel Olson • April 8, 2025
Deciding to list your home for sale is a big decision. And while there are many reasons you might want/need to sell, here are 3 questions you should ask yourself; and have answers to, before taking that step. What is my plan to get my property ready for sale? Assessing the value of your home is an important first step. Talking with a real estate professional will help accomplish that. They will be able to tell you what comparable properties in your area have sold for and what you can expect to sell your property for. They will also know specific market conditions and be able to help you put a plan together. But as you’re putting together that plan, here are a few discussion points to work through. A little time/money upfront might increase the final sale price. Declutter and depersonalize Minor repairs A fresh coat of interior/exterior paint New fixtures Hire a home stager or designer Exterior maintenance Professional pictures and/or virtual tour But then again, these are all just considerations; selling real estate isn’t an exact science. Current housing market conditions will shape this conversation. The best plan of action is to find a real estate professional you trust, ask a lot of questions, and listen to their advice. What are the costs associated with selling? Oftentimes it’s the simple math that can betray you. In your head, you do quick calculations; you take what you think your property will sell for and then subtract what you owe on your mortgage; the rest is profit! Well, not so fast. Costs add up when selling a home. Here is a list of costs you’ll want to consider. Real estate commissions (plus tax) Mortgage discharge fees and penalties Lawyer’s fees Utilities and property tax account settlements Hiring movers and/or storage fees Having the exact figures ahead of time allows you to make a better decision. Now, the real wildcard here is the potential mortgage penalty you might pay if you break your existing mortgage. If you need help figuring this number out, get in touch! What is my plan going forward? If you’re already considering selling your home, it would be fair to guess that you have your reasons. But as you move forward, make sure you have a plan that is free of assumptions. If you plan to move from your existing property to another property that you will be purchasing, make sure you have worked through mortgage financing ahead of time. Just because you’ve qualified for a mortgage in the past doesn’t mean you’ll qualify for a mortgage in the future. Depending on when you got your last mortgage, a lot could have changed. You’ll want to know exactly what you can qualify for before you sell your existing property. If you’d like to talk through all your options, connect anytime! It would be a pleasure to work with you and provide you with professional, unbiased advice.

What is a “No-Frills” Mortgage?

By Joel Olson • March 25, 2025
A no-frills service or product is where non-essential features have been removed from the product or service to keep the price as low as possible. And while keeping costs low at the expense of non-essential features might be okay when choosing something like which grocery store to shop at, which economy car to purchase, or which budget hotel to spend the night, it’s not a good idea when considering which lender to secure mortgage financing. Here’s why. When securing mortgage financing, your goal should be to pay the least amount of money over the term. Your plan should include having provisions for unexpected life changes. Unlike the inconvenience of shopping at a store that doesn’t provide free bags, or driving a car without power windows, or staying at a hotel without any amenities, the so-called “frills” that are stripped away to provide you with the lowest rate mortgage are the very things that could significantly impact your overall cost of borrowing. Depending on the lender, a “no-frills” mortgage rate might be up to 0.20% lower than a fully-featured mortgage. And while this could potentially save you a few hundreds of dollars over a 5-year term, please understand that it could also potentially cost you thousands (if not tens of thousands) of dollars should you need to break your mortgage early. So if you’re considering a “no-frills” mortgage, here are a few of the drawbacks to think through: You'll pay a significantly higher penalty if you need to break your mortgage. You'll have limited pre-payment privileges. Potential limitations if you want to port your mortgage to a different property. You might be limited in your ability to refinance your mortgage (without incurring a considerable penalty). Simply put, a “no-frills” mortgage is an entirely restrictive mortgage that leaves you without any flexibility. There are many reasons you might need to keep your options open. You might need to break your term because of a job loss or marital breakdown, or maybe you decide to take a new job across the country, or you need to buy a property to accommodate your growing family. Life is unpredictable; flexibility matters. So why do banks offer a no-frills mortgage anyway? Well, when you deal with a single bank or financial institution, it’s the banker’s job to make as much money from you as possible, even if that means locking you into a very restrictive mortgage product by offering a rock bottom rate. Banks know that 2 out of 3 people break their mortgage within three years (33 months). However, when you seek the expert advice of an independent mortgage professional, you can expect to see mortgage options from several institutions showcasing mortgage products best suited for your needs. We have your best interest in mind and will help you through the entire process. A mortgage is so much more than just the lowest rate. If you have any questions about this, or if you’d like to discuss anything else mortgage-related, please get in touch. Working with you would be a pleasure!