How New Mortgage Rules in 2024 Could Impact Vancouver Island Real Estate

by Maegan Morton

The Canadian government’s upcoming mortgage rule changes, set to take effect in December 2024, will significantly impact homebuyers across the country, including right here on Vancouver Island. As housing affordability remains a major concern, these new rules aim to make it easier for first-time buyers and those purchasing newly built homes to enter the market. Let’s explore how these changes could affect Vancouver Island’s real estate market and what they mean for you as a buyer or seller.

Key Mortgage Rule Changes for 2024

Higher Insured Mortgage Cap
Starting in December 2024, the insured mortgage cap will rise from $1 million to $1.5 million. While cities like Vancouver and Toronto are most affected by this due to their high home prices, buyers in more affordable markets, such as Vancouver Island, could still benefit. The increased cap allows buyers to qualify for insured mortgages with lower down payments, opening the door for more people to enter the market.

30-Year Amortization for First-Time Buyers and New Builds
First-time homebuyers and those buying newly constructed homes will have the option to extend their mortgage terms to 30 years instead of the usual 25. While this move reduces monthly payments, it does mean paying more interest over time. For many buyers, however, the lower initial payments can make homeownership more achievable.

Switching Lenders Without a Stress Test
Another important change allows insured mortgage holders to switch lenders at renewal without having to go through a stress test again. This change increases competition among lenders and can lead to better interest rates for homeowners across Canada, including those in Vancouver Island's diverse markets.

What Does This Mean for Buyers on Vancouver Island?

Vancouver Island offers a range of housing options, from bustling city hubs like Nanaimo to peaceful communities like Cedar, with prices generally more affordable than those in larger cities like Vancouver. Here’s how the new rules could benefit buyers:

Lower Monthly Payments: First-time buyers across Vancouver Island will appreciate the 30-year amortization option, which lowers monthly payments and makes it easier to buy a home without overstretching their budgets.
More Affordable Down Payments: The raised insured mortgage cap helps more buyers purchase homes with down payments as low as 5%, even if the home costs up to $1.5 million. This could make higher-priced properties, like oceanfront homes or larger acreages, more accessible.
Increased Competition Among Lenders: The ability to switch lenders without another stress test could save homeowners significant money at renewal, as they can shop around for better rates without the fear of failing to qualify again.

How Will Sellers on Vancouver Island Be Affected?

If you're thinking about selling, these changes could increase the number of buyers in the market, especially first-time buyers. The combination of longer amortization periods and more affordable down payment options may bring new buyers to Vancouver Island, where homes and acreages are priced more affordably compared to urban centers like Vancouver.

Additionally, the changes that make switching lenders easier could create more competitive offers on homes in the mid-range price points, especially for newer properties or those with modern upgrades.

Is This a Good Time to Buy or Sell?

With the new rules coming into play, buyers may find it more affordable to enter the market, while sellers could see increased demand, particularly for homes priced under the $1.5 million mark. As the changes roll out in December 2024, it’s a good idea to start preparing now if you’re considering buying or selling a property on Vancouver Island.

Stay Informed with Us

As one of Vancouver Island’s top realtors, I take pride in helping my clients stay ahead in an evolving market. Whether you're searching for your first home, a sprawling acreage, or looking to sell, these mortgage changes offer new possibilities.

I’m here to ensure your real estate journey is a successful one. Whether you're buying, selling, or simply exploring your options, let’s connect and create a plan tailored to your goals.

Reach out today!

Chat soon,

Maegan Morton & Loralee Burns

West Coast Property Team - Proudly Powered by B.C. Farm & Ranch Realty Corp.

Licensed REALTORS®

778-743-2380