Thursday, April 11, Finance Minister, Chrystia Freeland, announced the rule change extending the allowable amortization period by 5 years on insured mortgages for first-time homebuyers purchasing a newly built home.
Faced with a shortage of housing options and increasingly high rent and home prices, younger Canadians understandably feel like the deck is stacked against them," Freeland said in a news release. "By extending amortization, monthly mortgage payments will be more affordable for young Canadians who want that first home of their own."While most agree this is a step in the right direction, many believe there is still more work to be done to help the Canadian housing market and uplift the economy. One concern lies with the lack of opportunity for many Canadians to be able to purchase a new build. In cities like Toronto and Vancouver, the only option is to build up, leaving first-time buyers in these areas no better off than before. Ratesdotca mortgage and real estate specialist, Victor Tran, raised another concern with the ability to get an insured mortgage:
While it's currently possible to get an insured mortgage with a new build, it's rare," he said in a statement.
Freeland also announced the government would increase the amount first-time buyers can withdraw from RRSPs to purchase a home from $35,000 to $60,000. This change will come into effect April 16, 2024. People who have made or will make withdrawals between January 1, 2022, and December 31, 2025, will also have more time to begin repayment -- up to five years in total rather than two.
Faced with a shortage of housing options and increasingly high rents and home prices, many younger Canadians feel that the dream of homeownership is just that, a dream,” Freeland said. “Our government is changing that. We want homeownership to be a reality for younger Canadians.”Lengthening the amortization period has been a topic of discussion for quite some time within the mortgage industry, and a lot of professionals in the real estate sector are feeling positive about this step. Despite the concerns on a national level, we believe the local impact on Calgary will be a positive one. Calgary is still a thriving market with new builds popping up city-wide -- so the opportunity is definitely there -- and this change could help make dreams come true for so many Calgarians aspiring to be homeowners.
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