30-Year Amortization for
Insured Mortgages on New Builds!
Big News for Homebuyers: 30-Year Amortization for Insured Mortgages on New Builds!
If you’ve been dreaming of owning a brand-new home, here’s an exciting update: Homebuyers of newly built properties can now secure a 30-year amortization on an insured mortgage. This change can make homeownership more accessible, with lower monthly payments and increased buying power. Let’s break it down:
What’s the Update?
Buyers of newly built homes can now opt for a 30-year amortization on an insured mortgage. This option is available to buyers with less than 20% down payment, who require mortgage insurance through providers like CMHC.
Why Is This Important?
- Lower Monthly Payments: Spreading your payments over 30 years reduces your monthly costs, easing your budget.
- Greater Buying Power: With smaller payments, you may qualify for a higher loan amount, giving you access to more home options.
How Does It Work?
Let’s compare a 25-year amortization to the new 30-year option for the same property:
Example: $600,000 Purchase Price
- Down Payment: $35,000
- 5% on the first $500,000 = $25,000
- 10% on the remainder = $10,000
- Mortgage Amount (before CMHC Fee): $570,000
- CMHC Fee: $22,600 (added to the mortgage)
- Total Mortgage Amount: $592,600
- Interest Rate: 5% (example purposes)
Amortization Period
25 Years
30 Years
Monthly Payment
$3,417.52
$3,135.97
Savings: With a 30-year amortization, you save $281.55 per month, giving you more financial flexibility.
Who’s Eligible?
- Buyers of newly constructed homes.
- Borrowers with a down payment of less than 20%, requiring mortgage insurance.
- Applicants who meet lender credit and income qualifications.
Additional Benefits of New Builds
- Energy Efficiency: New builds often feature modern, energy-saving technologies, lowering utility costs.
- Customization: Choose finishes and layouts tailored to your preferences.
- Peace of Mind: New homes include warranties, protecting your investment.
Pros and Cons of a 30-Year Amortization:
Pros:
Cons:
- More Interest Paid Over Time: The longer the term, the more interest you pay overall.
- Slower Equity Growth: It takes longer to build equity in your home.
- Higher Total Costs: While monthly payments are lower, the total cost of your mortgage is higher.
What’s Next?
If you’re considering purchasing a newly built home, this new program could make it easier to turn your dream into reality. Contact me today to explore your options, calculate your affordability, and find a mortgage solution tailored to your goals.
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Phone: 250-575-8535
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