What does the new 30-year amortization rate mean?

BY Reid boles, REALTOR

Finally, some positive news to pass along from the banks! But in this case, it’s only for first time home buyers looking to purchase a newly built home. There are some strings attached and i’ll break those down here:

What is it? Starting August 1, 2024, first time home buyers will be able to purchase a new build with a 30-year amortization rate, meaning a lower payment or the ability to build a larger home than previously dreamed about, either way a huge win. An important thing to note here is that the house needs to be brand new and you would be the first owner of the house after the builder relinquishes title.  

Are resale homes included? Resale houses of any kind do not apply. When you are approved by your mortgage broker, they will give you a two-tiered approval. One for resale and a much better approval for a new build. Would you want a 50-year-old house with many unanswered questions like what’s behind the walls or underneath the flooring or would you like to design your new home with a custom builder like Discovery Homes and move in knowing that you have a new home warranty attached as well? It’s a easy choice for me.

More great news! Initially the allowable amount for an Registered Retirement Saving Plan (RRSP) withdrawal was $35,000 for first time homes buyers but now its increased to $60,000. They have also extended the beginning of the repayment schedule from 2 years to 5! This means you have five full years to sort things out before you have to begin to pay things back, another upside.  

 Who does this apply to? This applies to all new builds, spec homes, condos, townhouses, attached homes, and detached homes under 1 million dollars.

Questions? Feel free to reach out to me at anytime, 204-799-3951