Everything You Need to Know About CMHC’s New Insurance Options

Canada Mortgage and Housing Corporation (CMHC) will introduce new mortgage insurance options starting January 15, 2025, that allow borrowers to insure properties with up to four units, a value of up to $2 million, and with up to 90% loan-to-value (LTV) on a 30-year amortization. This change presents valuable opportunities for homeowners, property investors, and first-time buyers. At Concourse Mortgage Group in Calgary, Alberta, we’ve compiled answers to essential questions to help you understand how this new policy might benefit you.

What Does CMHC’s New Policy Entail?

Answer: CMHC’s updated policy allows mortgage insurance coverage for properties with the following characteristics:

Up to 4 residential units: Ideal for multi-unit family homes, rental properties, or multi-generational households.
Value up to $2 million: A significant increase over previous limits, enabling a broader range of property purchases.
Loan-to-value (LTV) up to 90%: Borrowers can now get up to 90% of the property value in loan coverage, which reduces upfront requirements.
Up to 30-year amortization: A longer amortization period means lower monthly payments, helping homeowners manage their budgets.

Who Is Eligible for This Program?

Answer: The CMHC program targets several types of borrowers who meet specific requirements, including:

First-time buyers and repeat buyers purchasing a principal residence
Real estate investors looking to buy properties with up to four residential units
Borrowers with a strong credit history and income stability
Those able to meet the down payment and other financial obligations under the new LTV guidelines
At Concourse Mortgage Group, we can help you determine eligibility and connect you with suitable options for your situation.

Why Is CMHC Expanding These Insurance Options?

Answer: CMHC aims to increase housing affordability and availability. This new policy:

Opens up mortgage insurance to more high-value properties
Encourages the development of multi-unit residences, addressing the need for rental units
Supports a diverse group of homebuyers and investors, improving access to various housing options

What Are the Benefits of the 90% Loan-to-Value (LTV) Option?

Answer: An LTV of up to 90% provides these advantages:

Lower Down Payments: Instead of saving for a full 20% down payment, buyers only need 10%, making it more accessible.
Increased Purchasing Power: Buyers can consider higher-value properties without the need for an additional cash outlay.
Greater Financial Flexibility: By putting less money down initially, homeowners can use the funds for other purposes, such as renovations.

How Does the 30-Year Amortization Affect Monthly Payments?

Answer: A longer amortization period results in lower monthly payments. Here’s how this helps:

Reduced Monthly Financial Pressure: Lower payments help homeowners manage budgets better.
Greater Financial Stability: For individuals with fluctuating income, a 30-year term provides flexibility and breathing room.
Longer-Term Investment: Property owners in Calgary and surrounding areas may find this beneficial for investment properties.

Are There Any Limitations to the CMHC’s New Program?

Answer: While beneficial, some limitations exist:

Principal Residence Requirement for Some Borrowers: First-time buyers must typically use the property as their primary residence.
Credit Score & Income Stability Requirements: CMHC requires borrowers to have a solid credit history and stable income.
Loan Maximum: While the $2 million limit is generous, high-value properties above this range are still not covered.

What Are the Steps to Apply for a CMHC-Insured Mortgage Under the New Policy?

Answer: Applying for a CMHC-insured mortgage includes the following steps:

1. Step 1: Contact Concourse Mortgage Group
   Schedule a consultation with one of our mortgage specialists to discuss your needs.
2. Step 2: Get Pre-Approved
   Pre-approval helps in understanding the amount you’re eligible for and confirms your financial preparedness.
3. Step 3: Find Your Property
   Look for properties that meet the guidelines—four units or fewer, within the $2 million limit.
4. Step 4: Submit Your Application
   Work with our team to prepare and submit your application, including necessary documentation (income, credit score, etc.).
5. Step 5: CMHC Insurance Approval
   Once your application is approved, CMHC will provide insurance coverage, allowing you to move forward confidently with your purchase.

How Can Concourse Mortgage Group Assist With This New CMHC Program?

Answer: Concourse Mortgage Group can assist by:

Assessing Your Eligibility: We analyze your financial profile and credit history to ensure you meet CMHC’s requirements.
Navigating the Application Process: Our mortgage experts guide you through each step, from pre-approval to closing.
Optimizing Your Down Payment: We help you take advantage of the 90% LTV option to minimize your upfront costs.
Exploring Multi-Unit Investments: Our team provides insight into maximizing returns on properties with up to four units.

What Are the Financial Benefits of Buying Multi-Unit Properties in Calgary?

Answer: Multi-unit properties can be a valuable investment, offering:

Rental Income: Generate income from tenants to offset mortgage payments.
Appreciation Potential: Calgary’s real estate market is strong, leading to potential value growth over time.
Diversified Investment: Owning a multi-unit property diversifies your real estate portfolio, helping to mitigate market fluctuations.

When Should I Apply for This New CMHC Insurance Coverage?

Answer: Applications open starting January 15, 2025. However, we recommend preparing early to maximize your options:

Start Initial Consultations: Connect with Concourse Mortgage Group to begin planning.
Get Pre-Approved: A pre-approval now ensures you’re ready to act when the program starts.
Begin Property Search: You’ll have ample time to research and select a property, especially in Calgary’s competitive market.

Can Existing Homeowners Benefit from This Program?

Answer: Yes, current homeowners may benefit by:

Expanding Property Holdings: Consider adding multi-unit properties as rental investments.
Upgrading Properties: Use CMHC’s coverage to transition to a higher-value property or multi-unit home.
Utilizing Increased Purchasing Power: With the 90% LTV and $2 million limit, homeowners have more flexibility to invest in diverse properties.

Key Takeaways:

1. Flexible Purchase Options
   • Properties with up to four units and a $2 million value can now be insured by CMHC.
2. Greater Accessibility
   • 90% LTV allows lower down payments, benefiting both first-time and repeat buyers.
3. Longer Amortization Period
   • 30-year term can make monthly payments more manageable, supporting Calgary homeowners and investors.
4. Opportunities for Multi-Unit Investments
   • Multi-unit properties are more accessible, creating investment potential in the Calgary area.

At Concourse Mortgage Group, we are here to help you leverage these new CMHC options to achieve your property goals in Calgary and beyond. Get in touch to start planning your application and discuss how these changes can help make your housing or investment goals a reality.

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