Government Announces Boldest Mortgage Changes in Decades

Last week, the Canadian Government introduced some incredible updates to mortgage rules and tax-free savings accounts, marking the biggest changes in over a decade! These programs are designed to help more Canadians achieve their dream of home ownership.

 

 

1) Increasing the $1 million price cap for insured/high ratios 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 down payment below 20%. Increasing the insured-mortgage cap has not been adjusted since 2012.

 

2) Expanding eligibility for 30 year mortgage amortizations to all first-time home buyers 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. 

 

3) Allowing all insured/high ratio mortgage holders to switch lenders at renewal without being subject to a stress test. Not having to re-qualify with a stress test when renewing with a different lender increases mortgage competition and enables more Canadians, with insured mortgages, to get the best deal. 

4) Launched the Tax-Free First Home Savings Account, which allows Canadians to contribute up to $8,000 per year, and up to a lifetime limit of $40,000, towards their first down payment. Tax-free in, tax-free out.

 

5) Enhanced First Time Home Buyers’ Plan limit from $35,000 to $60,000, to enable first-time home buyers to use the tax benefits of RRSP contributions to save up to $25,000 more for their down payment. 

 

For full details, check the government website: https://www.canada.ca/en/department-finance/news/2024/09/government-announces-boldest-mortgage-reforms-in-decades-to-unlock-homeownership-for-more-canadians.html