Today, the federal government introduced significant reforms to Canada's mortgage system aimed at improving housing affordability and accessibility.
One of the most notable changes is the increase in the maximum value for CMHC-insured mortgages, raising the cap from $1 million to $1.5 million. This adjustment allows buyers to qualify for a mortgage with a down payment of less than 20% on homes priced up to $1.5 million, making higher-priced properties more accessible.
This policy change is intended to assist buyers in high-cost housing markets, where surging prices have made it difficult for many to secure insured mortgages under the previous $1 million limit.
Additionally, the government has extended the option for 30-year amortization periods to all first-time homebuyers. Previously available only for new constructions, this change is aimed at easing the financial strain on younger buyers by spreading payments over a longer period, thereby lowering monthly mortgage costs.
Both measures are set to take effect on December 15, 2024.
These reforms come in response to increasing concerns about housing affordability. Deputy Prime Minister and Finance Minister Chrystia Freeland highlighted that the changes are designed to make homeownership more attainable for Canadians and address ongoing challenges in the housing market.
"Building on our action to help you afford a down payment, we are now making the boldest mortgages reforms in decades to unlock homeownership for younger Canadians," she said.
The government will soon introduce regulatory amendments to implement these changes, with further details to be released in the coming weeks.
