By Bonnie Thorlakson, Mortgage Specialist — Kelowna, BC

Summary: Three major changes came into effect between August 2024 and January 2025 — expanded 30-year amortization for first-time buyers and new builds (August 2024), a raised insured mortgage cap from $1M to $1.5M (December 15, 2024), and new secondary suite refinancing rules (January 15, 2025).

Change 1 — 30-Year Amortization for First-Time Buyers and New Builds

Effective: August 1, 2024

Previously, insured mortgages in Canada were capped at a 25-year amortization. That changed for two groups:

  • First-time homebuyers purchasing any property, with a down payment under 20%, can now amortize over 30 years. The federal definition of first-time buyer includes anyone who has not owned a home in the previous four calendar years.
  • Any buyer purchasing a newly constructed home — regardless of whether they are a first-time buyer — with an insured mortgage can now access 30-year amortization.

The practical effect: lower monthly payments, which help buyers qualify or simply breathe easier month-to-month. The trade-off is more total interest paid over the life of the loan. See the full 30-year amortization guide for a detailed breakdown of the numbers.

Change 2 — Insured Mortgage Cap Raised from $1M to $1.5M

Effective: December 15, 2024

Previously, CMHC mortgage insurance — which allows buyers to purchase with less than 20% down — was only available for properties purchased below $1,000,000. That cap was raised to $1,500,000.

This change has significant implications in BC, where home prices in many markets regularly exceed $1,000,000. Before December 15, buyers purchasing a $1.1M home were required to put down at least 20% (a minimum of $220,000). After December 15, the same buyer could potentially qualify with as little as 10% down on the first $500,000 and 10% on the remainder — a far lower cash requirement.

Who benefits most: Buyers in higher-priced markets like greater Vancouver, Victoria, and parts of the Okanagan where detached homes routinely exceed $1M. For Kelowna buyers in the $1M–$1.5M range, this rule opens up purchase options that previously required much larger down payments.

Important note: CMHC insurance still requires a minimum down payment structured as follows:

  • 5% on the first $500,000 of the purchase price
  • 10% on the portion between $500,001 and $1,500,000

For a $1,200,000 property, that means a minimum down payment of $95,000 ($25,000 on the first $500K + $70,000 on the next $700K). That’s a significant reduction from the previous requirement of $240,000 (20%).

Change 3 — Secondary Suite Refinancing

Effective: January 15, 2025

Homeowners can now refinance their insured mortgage to add a secondary suite — a basement suite, laneway house, or garden suite — up to 90% of the home’s appraised value (previously 80% for refinances). This rule is designed to both help homeowners offset mortgage costs through rental income and increase housing supply.

To qualify, the secondary suite must be a new addition to the property, not an existing suite, and the refinanced amount must be used for construction of the suite. The mortgage remains insured under CMHC guidelines.

For Kelowna homeowners considering this route, the rental income from a legal secondary suite can meaningfully offset a higher mortgage payment — making this a practical option for homeowners facing renewal payment shock or wanting to improve their monthly cash flow.

What These Rules Mean Together

Taken together, the 2024–2025 mortgage reforms represent the most substantial shift in Canadian housing finance policy in over a decade. They were designed to address affordability challenges in high-price markets by:

  1. Lowering the barrier to entry for first-time buyers (30-year amortization)
  2. Opening insured financing to a broader price range of homes (raised cap)
  3. Providing a path for existing homeowners to improve cash flow and add housing supply (suite refinancing)

Not every buyer benefits equally from all three changes. Whether and how these rules affect your specific situation depends on your purchase price, down payment, first-time buyer status, and goals.

Want to know which of these changes applies to your situation? Contact Bonnie — she can walk you through the rules as they apply to your specific purchase or refinance.

Do These Rules Apply to Uninsured (Conventional) Mortgages?

No. The insured mortgage cap, 30-year amortization expansion, and secondary suite refinancing rules all specifically apply to insured mortgages (those with less than 20% down). Conventional mortgages — where the buyer puts down 20% or more — have always had more flexibility on amortization and are not subject to the same government-set restrictions.

If you’re putting 20% or more down, speak with a mortgage specialist about what conventional terms are available to you. The rules are different and often more flexible.

Stress Test Still Applies

One thing that did not change: the federal mortgage stress test. All federally regulated lenders are still required to qualify borrowers at the higher of 5.25% or the contract rate plus 2%. The stress test was introduced to ensure borrowers can handle rate increases and remains in place regardless of down payment size or amortization period.

My name is Bonnie Thorlakson. I work with buyers across Kelowna and the Okanagan and stay current on exactly how rule changes like these affect eligibility, approval amounts, and monthly payments. Reach out and I’ll give you a straight answer on how the new rules apply to you.