Detailed impact analysis and policy breakdown
Price cap for insured mortgages increased from $1 million to $1.5 million, allowing <20% down on pricier homes.
Effective December 15, 2024, the federal government officially raised the price cap for insured mortgages from $1 million to $1.5 million. This is the first update to this cap since 2012.
Before this change, if you bought a home for $1.01 million, you were required to put 20% down ($202,000+). CMHC insurance—which allows for down payments as low as 5-10%—was only available for homes under $1 million.
With the new $1.5 million cap, a buyer can now purchase a $1.2 million home with a significantly smaller down payment (approximately $95,000 instead of $240,000), provided they qualify for the mortgage payments and insurance premiums.
Short Term (Bullish): This policy immediately increases demand in the $1M–$1.5M bracket, particularly in Toronto and Vancouver. Many buyers who were stuck renting because they couldn't save $250k cash for a down payment can now enter the market with $100k.
Critics argue this simply fuels demand without adding supply, potentially pushing prices in the $1M range closer to $1.5M. It also encourages buyers to take on significantly more debt. An insured mortgage on a $1.4M home results in a massive monthly payment that subjects buyers to higher interest rate risk.