The Canadian real estate market continues to evolve with meaningful changes from both government and lenders aimed at making homeownership more attainable. Whether you’re a first-time buyer, moving up, or downsizing, understanding these updates — and how they affect financing — can help you make smarter decisions and optimize your budget.

First-Time Buyers

🧠 What’s Changed for 2025–2026

✔ Increased insured mortgage cap
The federal government increased the maximum price for insured mortgages from $1 million to $1.5 million. This means buyers can put less than 20% down on homes up to $1.5 million — opening up higher-priced home options without needing a full 20% down payment.

✔ 30-Year Amortization Now Expanded
30-year amortization options are now available to all first-time home buyers (not just new builds) on insured mortgages, helping to reduce monthly payments.

✔ New GST/HST Rebate (PROPOSED)
A proposed GST/HST rebate for first-time home buyers could eliminate the federal portion of GST/HST on new homes up to $1 million, with a phased rebate up to $1.5 million (up to $50,000). The bill is tabled and may become law soon but isn’t yet in effect.

✔ First-Time Home Buyer Incentive (FTHBI) Cancelled
The shared-equity FTHBI program has been discontinued (no longer available).

🏠 a) Saving for a Down Payment

Minimum Down Payment Rules (Updated):

• 5% on homes $500,000 or less
• 5% on first $500,000 + 10% on portion between $500,000 and $1,499,999
• 20% on homes $1.5 million and above

Homes up to $1.5 million can still qualify for insured mortgages with <20% down thanks to the increased cap.

🧾 b) Understanding Mortgage Options

• Fixed vs. Variable Rates: Stable vs. potentially savings depending on market movement.
• Pre-Approval: Helps define budget and signals seriousness to sellers.
• 30-Year Amortization (New): Now available on insured mortgages for first-time buyers, lowering monthly payments by extending the term.

💰 c) Additional Costs

• Closing Costs: Typically, 1.5%–4% of purchase price for legal fees, land transfer tax, inspections, etc.
• GST/HST New Housing / FTHB GST Rebate (PROPOSED):
  • Under the proposed First-Time Home Buyers’ GST/HST rebate, buyers could recover up to 100% of GST on new homes up to $1 million, with a phased rebate up to $1.5 million (up to $50,000).
  • This is in addition to any existing GST/HST New Housing Rebate where applicable.

Buyers Moving Up

🧠 What’s New

✔ Portability and Refinancing Rules
Stronger mortgage portability and refinancing options allow you to potentially switch lenders or carry forward your existing rate without re-stress testing (as part of expanded mortgage charter protections).

🏡 a) Evaluating Your Current Home

• Equity Position: Use accumulated equity as down payment on your next home.
• Market Conditions: A seller’s vs buyer’s market influences your strategy.

🏦 b) Financing the New Purchase

• Port Your Mortgage: Keeping your current rate and terms may be possible.
• Bridge Financing: Helps if timing doesn’t align between sale and purchase.
• Affordability: Factor in utilities, taxes, and maintenance.

Buyers Downsizing

🧠 What’s Important Now

• With interest rates stabilizing and some provincial incentives remaining, downsizing can free up equity and offer ongoing cost savings.
• Downsizers should also consider new provincial or municipal rebates where available.

🏡 a) Timing & Market Strategy

• Timing – come up with a plan to sell and purchase/rent
• Factor renovation and financing on the new property.

💵 b) Financial Planning

• Downsizing can provide extra funds for retirement, travel, or investment.
• Less space often means lower utilities, taxes, and upkeep.

General Financing Considerations

📊 Credit Score & Financial Health

• A strong credit score and low debt will help you access better mortgage terms.

📈 Debt Ratios & Stress Test Rules

• Lenders look at Gross Debt Service (GDS) and Total Debt Service (TDS) ratios when qualifying you (typically under certain thresholds, depending on lender and product).

🏛 Government & Tax Incentives

• Home Buyers’ Plan (HBP): Withdraw up to $35,000 (per person) from RRSPs for a home purchase.
• First Home Savings Account (FHSA): Save up to $40,000 tax-free to use toward a qualifying home.
• GST/HST Rebates: Existing GST/HST New Housing Rebate and proposed FTHB GST/HST rebate could significantly reduce tax costs on new builds.
• Land Transfer Tax & Provincial Rebates: Many provinces offer rebates on land transfer tax for first-time buyers (e.g., Ontario up to $4,000).

👩‍💼 Professional Advice

• Mortgage Brokers: Access multiple lender options and help navigate changing rules.
• Real Estate Agents: Guide negotiation strategy, pricing, and market conditions.
• Tax/Financial Advisors: Help maximize federal and provincial incentives.

Quick “What’s Changed (2024–2026)” Summary

✔ Insured mortgage cap increased to $1.5 M (allowing <20% down on higher priced homes).
✔ 30-year amortizations expanded to all first-time buyers and purchases of newly built homes to lower monthly payments.
✔ First-Time Home Buyer Incentive (FTHBI) has ended.
✔ GST/HST rebate for first-time buyers proposed, offering up to $50,000 in savings on new homes up to $1.5 M (pending legislation).
✔ FHSA & HBP remain valuable tools for down payment savings.

Whether you’re a first-time buyer, upgrading, or downsizing, these updates matter — and planning with them in mind can help you financially optimize your purchase. Always consult with a mortgage professional to tailor strategies to your situation.

Feel free to contact me with your questions.

Reni McNeil
Mortgage Brokers Ottawa
Apply online: www.renimcneil.ca
renim@mortgagebrokersottawa.com
License: 11759