On Monday, the federal government announced some changes for those trying to become homeowners.
The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance announced changes to two mortgage rules, making them more affordable for Canadians, the changes include:
- Expanding eligibility for 30 year mortgage amortizations to all first-time homebuyers and to all buyers of new builds.
- "Effective December 15, 2024, to reduce the cost of monthly mortgage payments and help more Canadians buy a home. By helping Canadians buy new builds, including condos, the government is announcing yet another measure to incentivize more new housing construction and tackle the housing shortage. This builds on the Budget 2024 commitment, which came into effect on August 1, 2024, permitting 30-year mortgage amortizations for first-time homebuyers purchasing new builds, including condos," stated a press release.
- Increasing the $1 million price cap for insured mortgages to $1.5 million.
- "effective December 15, 2024, to reflect current housing market realities and help more Canadians qualify for a mortgage with a downpayment below 20 per cent. Increasing the insured-mortgage cap—which has not been adjusted since 2012—to $1.5 million will help more Canadians buy a home."
Patricia McKean a local mortgage broker with Mortgage Architects explained how expanding eligibility for 30-year mortgage amortizations to all first-time homebuyers could help Airdronians.
"Homeowners are having a really tough time right now with the house prices going up, being able to afford the monthly payments as well as qualifying for them. We also use a stress test in Alberta where we add 2 per cent to the mortgage rate that they're given. The changes announced Monday will help them find that house and be able to manage those monthly mortgage payments easier."
According to McKean, there is a stipulation many people may not realize when it comes to being classified as a first-time homebuyer. It's not owning a home in the last four years. Not just someone who has never purchased a home in the past. This can affect quite a few people, not just a traditional first-time homebuyer. Expanding eligibility to 30 years will mean it costs a little more for those who choose the option.
"It is going to cost people more money because they're extending out their mortgage to that 30 years, if you need to do this make some extra payments if you can so you're cutting down that extra five-year amortization in the long run."
Increasing the price cap to $1 million for insured mortgages to $1.5 million, won't affect residents of Alberta that much, McKean believes.
"It will affect the Toronto and Vancouver markets more. Somebody purchasing something at $1.5 million can look at putting 10 per cent or maybe 15 per cent down versus the full 20 per cent down."
McKean also believes with inflation trending downwards, the real estate market will get busier.
"The biggest thing is affordability. If the payment is affordable to you, then it's a good product for you."
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