The federal government announced changes to mortgage rules on Monday to help more qualified buyers access mortgages and become homeowners.
Effective December 15 this year, the changes include allowing 30-year amortizations for first-time buyers and newly constructed homes, as well as raising the limit on insured mortgages from $1 million to $1.5 million to reflect current housing prices. Homeowners will also have the freedom to switch mortgage lenders at renewal without a new stress test.
“We are now making the boldest mortgage reforms in decades to unlock homeownership for younger Canadians,” said The Honourable Chrystia Freeland, deputy prime minister and minister of finance. “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,” added The Honourable Sean Fraser, minister of housing, infrastructure, and communities.
Support from the country’s national industry voice
The Canadian Real Estate Association (CREA) welcomes the reforms, calling them a significant step towards improving access to homeownership and making housing more attainable, something realtors have advocated for.
“This is good news for buyers, particularly first-time buyers and those in more expensive markets such as Toronto and the Greater Toronto Area (GTA), as well as Vancouver and surrounding areas,” said Janice Myers, CREA CEO.
Broad support across the industry
The mortgage reforms will drive more housing construction and supply, reflecting recommendations from the Canadian Home Builders’ Association (CHBA). The Toronto Regional Real Estate Board (TRREB) also strongly supports the measures, which will reduce monthly mortgage payments and stimulate new housing construction.
Karen Yolevski, COO of Royal LePage Real Estate Services Ltd., agrees that the extended mortgage powers will help many purchasers transition from renter to homeowner, especially in expensive markets.
TRREB: Another call to action
TRREB notes that increasing the insured mortgage price cap will allow more people to qualify for an insured mortgage in high-cost areas like the GTA. They also support allowing insured mortgage holders to switch lenders at renewal without a new stress test.
John DiMichele, TRREB CEO, reiterated the call for extending this measure to uninsured mortgages to increase competition among lenders.
CMBA: Price cap jump ‘reflects lack of policy change in over 10 years … will finally provide more options’
The Canadian Mortgage Brokers Association — British Columbia (CMBA-BC) and CMBA National support the expansion of eligibility for 30-year mortgage amortizations to include all first-time homebuyers and buyers of new build homes.
Rebecca Casey, president of CMBA-BC, expressed pleasure in the government finally listening to their advice and making these changes.
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