Ottawa — The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, today unveiled a series of significant reforms to mortgage rules aimed at making homeownership more affordable for Canadians. These measures are designed to address the challenges faced by homebuyers, especially in an increasingly competitive housing market.
Key highlights of the reforms include:
1.Increase in Insured Mortgage Price Cap:
Starting December 15, 2024, the price cap for insured mortgages will rise from $1 million to $1.5 million. This adjustment reflects current market conditions and aims to help more Canadians qualify for a mortgage with a downpayment below 20%. The cap has not been adjusted since 2012, and this increase is seen as crucial to enabling a broader range of Canadians to enter the housing market.
2. Expanded 30-Year Mortgage Amortizations:
First-time homebuyers and those purchasing newly constructed homes, including condos, will now be eligible for 30-year mortgage amortizations, also effective December 15, 2024. This move is expected to reduce monthly mortgage payments, easing the financial burden for Canadians and encouraging more housing construction. The initiative builds on the 2024 Budget commitment, which took effect on August 1, 2024, allowing first-time buyers of new builds to access 30-year amortizations.
These reforms are part of a broader strategy to tackle Canada’s housing affordability crisis. Minister Freeland emphasized that these changes aim to both assist current homebuyers and stimulate new housing development. The government is also enhancing mortgage flexibility through the Canadian Mortgage Charter, introduced in Budget 2024. This charter ensures that insured mortgage holders can switch lenders at renewal without undergoing another stress test, fostering competition and giving Canadians better mortgage options.
Freeland stated, “By increasing the insured mortgage cap and expanding 30-year amortizations, we are helping Canadians overcome one of the most significant barriers to homeownership—affordability. These changes reflect our government’s commitment to ensuring that owning a home remains within reach for middle-class families.”
These new measures come at a time when the housing market remains a key concern for many Canadians, with demand outpacing supply in several major cities. The government hopes these reforms will create more opportunities for prospective homebuyers while stimulating new housing developments across the country.