Canadians put in a lot of effort to afford a home, but high mortgage payments make it tough, especially for Millennials and Gen Z. To make it easier for younger folks to buy their first home, new mortgage rules started on August 1, 2024, allowing 30-year insured amortizations for first-time buyers of new builds.
September 16th, 2024, Deputy Prime Minister Chrystia Freeland announced a multiple changes to mortgage rules aimed at making it easier for Canadians to afford homes.
Here are the highlights:
Higher Insured Mortgage Price Cap: Starting December 15, 2024, the insured mortgage cap will be raised to $1.5 million to better match today’s housing market and make it easier for more Canadians to qualify for a mortgage with a down payment under 20%. This change, the first since 2012, will help more people achieve homeownership.
30-Year Amortizations for More Buyers: Starting December 15, 2024, all first-time homebuyers and buyers of new builds will be eligible for 30-year mortgage amortizations. This aims to lower monthly payments and make it easier for more Canadians to buy homes. By supporting purchases of new builds, including condos, the government is also encouraging more housing construction to address the housing shortage. This follows the Budget 2024 commitment that began on August 1, 2024, allowing 30-year amortizations for first-time buyers of new builds.
These new measures build on the updated Canadian Mortgage Charter introduced in Budget 2024, which lets all insured mortgage holders switch lenders at renewal without facing another stress test. This means they won’t have to requalify, boosting competition and allowing more Canadians with insured mortgages to find better and cheaper deals.
While the federal government is focused on making mortgages more affordable so more Canadians can buy homes, it’s also taking important steps to protect the rights of both home buyers and renters. T
As part of Budget 2024, they introduced plans for a Renters’ Bill of Rights and a Home Buyers’ Bill of Rights. These initiatives will help shield renters from unfair practices, simplify leases, and enhance price transparency, making the home-buying process fairer and more straightforward.
The government is collaborating with provinces and territories to roll out these plans using $5 billion from the new Canada Housing Infrastructure Fund. As part of this effort, they’re urging provinces and territories to adopt measures like protecting Canadians from renovictions and blind bidding, standardizing lease agreements, and providing sales price history during title searches, all aimed at creating a fair housing market across the country.
Further, The revamped Canadian Mortgage Charter, announced in Budget 2024, lays out what financial institutions should do to help Canadians struggling with their mortgages and make it easier to buy a first home.
Mortgage loan insurance lets Canadians get a mortgage for up to 95% of a home's price, helping them snag a decent interest rate even with a smaller down payment.
The federal government’s housing plan—one of the biggest in Canadian history—aims to open up nearly 4 million new homes to make housing more affordable. To help Canadians save for a down payment, recognizing that it can be a hefty challenge, the government has:
Launched the Tax-Free First Home Savings Account, which lets Canadians put away up to $8,000 a year, with a lifetime limit of $40,000, for their first down payment. It’s tax-free both when you contribute and when you take it out.
Increased the Home Buyers’ Plan limit from $35,000 to $60,000 in Budget 2024, so first-time buyers can use tax benefits from their RRSP contributions to save an extra $25,000 for their down payment. This plan lets Canadians withdraw from their RRSP to buy or build a home, and it works alongside the Tax-Free First Home Savings Account.
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“Everyone deserves a safe and affordable place to call home, and these mortgage measures will go a long way in helping Canadians looking to buy their first home.”
- The Honourable Sean Fraser, Minister of Housing, Infrastructure and Communities
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