The Government of Canada has announced new rules and changes to mortgages to help unlock homeownership for more Canadians, particularly Millennials and Gen Z.
In the announcement from Deputy Prime Minister and Minister of Finance The Honourable Chrystia Freeland, there are three key changes.
1. Increasing the $1 million price cap for insured mortgages to $1.5 million: Coming into effect as of December 15, 2024, this will help more Canadians qualify for a mortgage with a down payment below 20 per cent.
2. Expanding eligibility for 30 year mortgage amortizations to all first-time homebuyers: First-time homebuyers can benefit from an extra 5 years of amortization on their mortgage to help make a home more affordable.
3. Expanding eligibility for 30 year mortgage amortizations tall buyers of new builds: Including condos, the government is is aiming to incentivize more new housing construction and tackle the housing shortage.
4. Allow all insured mortgage holders to switch lenders at renewal without being subject to another mortgage stress test: By not having homeowners to re-qualify when renewing with a different lender, the aim is to increase mortgage competition and enable more Canadians with insured mortgages to switch to the best, cheapest deal.
These changes are a continuation of other efforts from the federal government to help first-time homebuyers. Other programs introduced include the Tax-Free First Home Savings Account, which allows Canadians to contribute up to $8,000 per year, up to a lifetime limit of $40,000, towards their first down payment. These savings are tax-free both on deposit and withdrawal. They also improved the Home Buyers’ Plan by increasing the limit from $35,000 to $60,000. The Home Buyers’ Plan allows Canadians to withdraw from their RRSP to buy or build a home and can be combined with savings through the Tax-Free First Home Savings Account.
Here at Jump Realty our agents will give you honest advice on what course of action is best for you in their professional opinion and will always put taking care of your best interests first! With offices in Windsor, Kingsville, LaSalle, Harrow, and Chatham, no matter where you are, a Jump agent is ready to help. Please contact us for any housing needs and let us give you a better real estate experience!
Source: Government announces boldest mortgage reforms in decades to unlock homeownership for more Canadians, Government of Canada; https://www.canada.ca/en/department-finance/news/2024/09/government-announces-boldest-mortgage-reforms-in-decades-to-unlock-homeownership-for-more-canadians.html
