If you've been showing listings between $1 million and $1.5 million and assuming those buyers need 20% down, that assumption is out of date. Since December 15, 2024, the federal government raised the price cap for an insured mortgage from $1 million to $1.5 million, and paired it with expanded access to 30-year amortizations. Together, these two changes meaningfully widen the pool of buyers who can qualify for homes in that price range, and it's worth knowing the mechanics well enough to explain it to a buyer standing in your listing.
What actually changed
Before December 2024, any home priced above $1 million required a minimum 20% down payment, full stop, because it couldn't be insured. Now, homes priced up to $1.5 million can qualify for an insured mortgage with as little as 5-10% down.
The minimum down payment tiers work like this:
| First $500,000 of the purchase price | 5% minimum down |
| Portion between $500,000 and $1,499,999 | 10% minimum down |
| Price at or above $1,500,000 | Insured mortgages not available; 20% minimum down still applies |
Here's how that plays out on a $1.2 million purchase:
| 5% of the first $500,000 | $25,000 |
| 10% of the remaining $700,000 | $70,000 |
| Total minimum down payment | $95,000 (about 7.9%) |
| Old rule (20% down required above $1M) | $240,000 |
That's a $145,000 difference in the cash a buyer needs on hand, on the exact same home. For a lot of qualified buyers, that gap was the entire reason a $1.1 or $1.2 million listing felt out of reach.
30-year amortizations: who actually qualifies
Alongside the price cap change, 30-year amortizations, up from the standard 25-year maximum, are now available in two situations:
- All first-time buyers, regardless of their down payment size or whether their mortgage is insured.
- All buyers of newly constructed homes, including pre-construction and new-build purchases, regardless of whether they're first-time buyers or how much they're putting down.
A longer amortization lowers the monthly payment, which can be the difference between a buyer passing or failing the stress test. As a rough guide, every $100,000 of mortgage debt costs about $48 less per month under a 30-year amortization than a 25-year one, at a 5% interest rate. On a $700,000 mortgage, that works out to roughly $286 less per month.
Combined with the higher price cap, a first-time buyer or new-build purchaser can put down as little as 5-10% on a home up to $1.5 million and stretch payments over 30 years, a combination that simply didn't exist before late 2024.
The qualification basics still apply
None of this removes the underlying qualification requirements. Buyers still need to pass the federal stress test, qualifying at whichever is higher: their contract rate plus 2%, or a 5.25% floor rate. Lenders are still generally looking for a Gross Debt Service ratio at or below 39% and a Total Debt Service ratio at or below 44%, along with a minimum credit score, typically around 600 for an insured mortgage.
What's changed is the down payment and amortization mechanics that determine whether a buyer clears those thresholds in the first place, not the thresholds themselves.
What this means for you
A few practical takeaways worth carrying into your next listing conversation:
- Listings priced between $1 million and $1.5 million are no longer a 20%-down-only market. Buyers with 5-10% down are a real, and often underestimated, part of that buyer pool now.
- First-time buyers and new-build purchasers have more room in their budget than they may realize, since the 30-year amortization directly lowers what they need to qualify for a given price point.
- The math isn't intuitive for most buyers, or for that matter, most agents. A buyer who assumes they need $240,000 down on a $1.2 million home may be walking past listings they can actually afford. Getting them a real pre-approval early avoids that.
If you have a buyer who's ruled out a price range based on the old down payment rules, it's worth a second look. Send them my way and I'll run the actual numbers before either of you assumes anything.
This post reflects insured mortgage rules in effect as of 2026, based on federal regulations that took effect December 15, 2024. Down payment tiers, amortization eligibility, and qualification thresholds are set federally and can change. Confirm current details with a licensed mortgage professional before advising a client on affordability.