The Canadian Liberal government recently announced proposed changes to the Canadian mortgage market, aimed at making it easier for first-time homebuyers and those purchasing new builds to afford a home. These changes include expanding the availability of 30-year amortizations and raising the cap on insured mortgage products. These changes are set to go into effect on December 15th, and were announced by Deputy Prime Minister and Minister of Finance Chrystia Freeland in Ottawa during the fall sitting of the House of Commons. The proposed changes are designed to help Canadians afford their first home by reducing the monthly burden of carrying a mortgage, although it may result in the borrower paying more in interest over the life of the loan.
One of the key changes is the extension of the maximum amortization period from 25 to 30 years for first-time homebuyers and those purchasing new builds. This will allow for lower monthly payments, making it easier for individuals to afford a home. Additionally, the Liberals are increasing the price cap for taking out insured mortgages from $1 million to $1.5 million. This change will help remove a significant barrier for Canadians looking to purchase a property worth more than $1 million, especially in expensive housing markets where the average home price exceeds the previous cap. Under the proposed changes, individuals could put down between five and 20 percent of the value of a home worth up to $1.5 million, reducing the size of the down payment needed.
The current price cap for insured mortgages has been a significant barrier for many Canadians looking to purchase a home worth more than $1 million, as households have to put down more than 20 percent upfront for uninsured mortgages. The proposed changes aim to make homeownership more accessible by lowering the down payment requirements for properties valued up to $1.5 million. These changes are particularly important in expensive housing markets where the average home price exceeds the current cap, making it difficult for prospective buyers to save enough to own a home. The Liberal government hopes that these changes will make it easier for Canadians to enter the housing market and achieve homeownership.
The proposed changes to the Canadian mortgage market come after the Liberals instituted new changes on August 1st, allowing 30-year amortizations for first-time homebuyers taking out insured mortgages on new builds. These changes are part of the government’s efforts to address housing affordability and help more Canadians achieve their dream of homeownership. By expanding the availability of 30-year amortizations and raising the cap on insured mortgage products, the government hopes to make it easier for first-time homebuyers and those purchasing new builds to enter the housing market. These changes will go into effect on December 15th, and are expected to benefit many Canadians looking to buy their first home or purchase a new build property.
Overall, the proposed changes to the Canadian mortgage market are designed to make homeownership more accessible and affordable for Canadians, particularly first-time buyers and those purchasing new builds. By expanding the availability of 30-year amortizations and raising the cap on insured mortgage products, the Liberal government aims to help more Canadians enter the housing market and achieve their dream of owning a home. These changes will go into effect on December 15th, and are expected to have a positive impact on housing affordability in Canada. The government hopes that by making these changes, more Canadians will be able to afford a home and build wealth through homeownership.
