25 Sep Government Introduces Decades Boldest Mortgage Reforms For Mortgage Borrowers
Canadians work hard to afford a home. However, the high cost of mortgage payments remains a barrier to homeownership, particularly among Millennials and Generation Z. To assist more Canadians, particularly younger generations, in acquiring their first home, new mortgage laws went into effect on August 1, 2024, permitting 30-year guaranteed mortgage amortizations for first-time homeowners purchasing new buildings.
The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, today announced a series of mortgage rule changes aimed at making mortgages more affordable to Canadians and putting homeownership within reach.
- Insured Mortgage Cap Raised To $1.5 Million
Increasing the insured mortgage price cap from $1 million to $1.5 million, beginning December 15, 2024, to reflect current housing market realities and assist more Canadians in qualifying for a mortgage with a down payment of less than 20%. With this new change, the insured mortgage threshold will rise to $1.5 million ever since 2012 and will help more and more Canadians to become proud homeowners.
- 30 Year Mortgage Amortization Period Introduced
Effective December 15, 2024, all first-time homebuyers and buyers of new builds will be eligible for 30-year mortgage amortizations, lowering monthly mortgage payments and assisting more Canadians in purchasing a home, including condominiums.
These new provisions complement the stronger Canadian Mortgage Charter announced in Budget 2024, which allows insured mortgage holders to move lenders without undergoing another mortgage stress test during renewal. Not having to re-qualify when renewing with a different lender promotes mortgage competition and allows more Canadians with insured mortgages to move to the best, cheapest deal.
These are the most major mortgage modifications, and they are part of the federal government’s goal to build nearly 4 million new homes, the most ambitious housing program in Canadian history, in order to assist more Canadians, become homeowners.
Conclusion
The federal government is working to make mortgages more affordable so that more Canadians may become homeowners, while also taking strong steps to defend the rights of house purchasers and renters. Today, as promised in Budget 2024, the government unveiled plans for a Renters’ Bill of Rights and a Home Buyers’ Bill of Rights. These new plans will safeguard tenants from unfair tactics, simplify leases, and boost price transparency, as well as make the home-buying process more fair, open, and transparent.
The government is collaborating with provinces and territories to implement these designs by using the $5 billion in funds available through the new Canada Housing Infrastructure Fund. As part of these negotiations, the federal government is urging provinces and territories to take steps such as protecting Canadians from renovictions and blind bidding, standardizing lease agreements, making sales price history available on title searches, and much more to make the housing market more equitable across the country.
Want to know how this new rate cut is going to impact your mortgage payments? Feel free to talk to our expert mortgage brokers in Abbotsford and we’ll guide you through.