Owning a home is a dream for many Canadians. Still, the high cost of mortgage payments often stands in the way, especially for Millennials and Gen Z. To address this challenge, significant new mortgage rules came into effect on August 1, 2024, paving the way for 30-year insured mortgage amortizations for first-time homebuyers purchasing new builds. These changes are part of a broader effort to make homeownership more attainable for Canadians, particularly the younger generations.
The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, recently announced a comprehensive suite of reforms designed to make mortgages more affordable and bring homeownership within reach for more Canadians.
Here’s a breakdown of what’s changing:
Increased Price Cap for Insured Mortgages
Beginning December 15, 2024, the price cap for insured mortgages will increase from $1 million to $1.5 million. This adjustment, the first since 2012, aligns with current housing market conditions and allows more Canadians to qualify for a mortgage with a down payment of less than 20%. The increase will help many Canadian families move closer to buying a home.
Expanded Eligibility for 30-Year Amortizations
Effective December 15, 2024, eligibility for 30-year mortgage amortizations will expand to include all first-time homebuyers and all purchasers of new builds. This change aims to lower monthly mortgage costs and encourage new housing construction—tackling the housing shortage head-on. Originally introduced in Budget 2024, these amortization options were first made available to first-time buyers of new builds, including condos, on August 1, 2024.
Canadian Mortgage Charter Enhancements
These reforms are bolstered by the updated Canadian Mortgage Charter, allowing all insured mortgage holders to change lenders upon renewal without facing a new stress test. This flexibility fosters greater competition among lenders, helping Canadians secure the best possible mortgage deals.
Ambitious Housing Plans
These mortgage reforms represent the most significant changes in decades and form part of the federal government’s plan to build nearly 4 million new homes—marking the most ambitious housing strategy in Canadian history. The government will release further details on implementing these proposals in the coming weeks.
Protecting Home Buyers and Renters
Beyond making mortgages more affordable, the federal government is also taking action to protect the rights of home buyers and renters. As announced in Budget 2024, new blueprints for a Renters’ Bill of Rights and a Home Buyers’ Bill of Rights have been released. These plans aim to safeguard renters from unfair practices, simplify leases, and increase price transparency. Meanwhile, for homebuyers, the focus is on fairness and transparency in the buying process. These blueprints are being developed with provinces and territories, supported by the $5 billion Canada Housing Infrastructure Fund.
The government is urging provinces and territories to implement measures to prevent renovictions and blind bidding, standardize lease agreements, and make sales price history accessible via title searches. Collectively, these steps aim to create a fairer and more equitable housing market across Canada.
To learn more about how these changes impact you and your ability to borrow, get in touch today!
