Government Announces Mortgage Improvements

“We have taken bold action to help more Canadians afford a down payment, including with the Tax-Free First Home Savings Account, through which more than 750,000 Canadians have already started saving. Building on our action to help you afford a down payment, we are now making the boldest mortgages reforms in decades to unlock homeownership for younger Canadians. We are increasing the insured mortgage cap to reflect home prices in more expensive cities, allowing homebuyers more time to pay off their mortgage, and helping homeowners switch lenders to find the lowest interest rate at renewal.”

– The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance

Starting December 15, 2024, the cap for insured mortgages will increase from $1 million to $1.5 million to better reflect the current housing market and assist more Canadians in qualifying for mortgages with down payments below 20 percent. This adjustment, the first since 2012, is designed to make home buying more attainable.

Additionally, eligibility for 30-year mortgage amortizations will be expanded to include all first-time homebuyers and purchasers of new builds, also effective December 15, 2024. This change aims to lower monthly mortgage payments and encourage more Canadians to buy homes. beginning on August 1, 2024, which already allowed 30-year amortizations for first-time buyers of new builds, including condos.

These new measures build on the enhanced Canadian Mortgage Charter introduced in Budget 2024, which allows insured mortgage holders to switch lenders at renewal without facing an additional mortgage stress test. This change facilitates greater competition among lenders and makes it easier for Canadians with insured mortgages to find the best and most affordable rates.

These changes are a start are a good start however as rates are are still high, the stress test that was introduced when rates where at record lows is still in place and forcing buyer to qualify for much higher rates. changes on these regulations would effect a better result for first time buyers who have held out of the real estate market for the last few years.