Canada Announces Mortgage Reforms to Unlock Homeownership

The Canadian government has introduced the most significant mortgage reforms in decades to help more Canadians achieve the dream of homeownership. The high cost of mortgages has made it difficult for many to enter the housing market, but these new rules aim to make homeownership more attainable for first-time buyers and those purchasing new builds.

Key Changes to Mortgage Rules

1. Increasing the Insured Mortgage Price Cap
   Effective December 15, 2024, the price cap for insured mortgages will increase from $1 million to $1.5 million. This change reflects the realities of today’s housing market and helps more Canadians qualify for an insured mortgage with less than a 20% downpayment. This increase will allow more people, especially in high-cost areas, to secure a mortgage with affordable terms.
2. 30-Year Mortgage Amortizations
   Also starting December 15, 2024, first-time buyers and all purchasers of new builds will be eligible for 30-year insured mortgage amortizations, extending the repayment period to reduce monthly payments. This is a significant step in helping Canadians manage housing costs, particularly in cities with high property prices. The government aims to promote new construction by making it easier for buyers to afford newly built homes, including condos.
3. Increased Mortgage Competition
   The reforms build on the Canadian Mortgage Charter introduced in Budget 2024, which allows all insured mortgage holders to switch lenders at renewal without undergoing another mortgage stress test. This increases competition among lenders and gives homeowners more flexibility to find the best mortgage rates when renewing.

What does this mean for you? 

If you’re a first-time homebuyer or looking to buy a new build, these reforms could significantly improve your chances of securing a mortgage. With increased price caps and longer repayment terms, more Canadians will be able to afford homes in the country’s hottest real estate markets. Additionally, if you already have an insured mortgage, you’ll have more options to switch lenders at renewal and find the best deal without undergoing another stress test.

The Canadian government’s new mortgage reforms are a major step toward addressing housing affordability, particularly for younger generations and first-time buyers. Combined with other measures like the Tax-Free First Home Savings Account and the Home Buyers’ Plan, these changes make it easier for Canadians to save for a downpayment and secure a mortgage. As the government continues to build millions of new homes, the future looks brighter for Canadians hoping to achieve their dream of homeownership.

If you’re thinking about buying a home, now might be the perfect time to explore your options. Have any questions or want more information? Reach out and we’d be happy to chat!