Is the Government Finally Getting Real About Homeownership?
For years, we’ve heard about housing changes that promise to make homeownership more affordable, but are we finally seeing a game-changer?
The Canadian government just dropped what they’re calling the boldest mortgage reforms in decades—and honestly, this one might actually move the needle.
Let’s break it down.
What’s Changing?
On December 15, 2024, two big changes are kicking in that could give more Canadians—especially first-time buyers—a real shot at homeownership.
- The $1 Million Cap is Out: The new insured mortgage price cap is jumping from $1 million to $1.5 million. If you’ve been watching the housing market in places like Vancouver and Toronto, you know $1 million just doesn’t cut it anymore. With this change, buyers who don’t have 20% down can still qualify for an insured mortgage on homes up to $1.5M. That’s a big deal for those trying to break into the market.
- 30-Year Mortgages Are Back: First-time buyers and buyers of new builds can now stretch their mortgage out over 30 years instead of 25. That’s huge. It means lower monthly payments, which could be the difference between affording a home and staying stuck in the rental cycle. Plus, the government is hoping this will also spark more new housing construction.
These two moves are part of a bigger plan to make mortgages more affordable and get more Canadians into homes.
So, What’s the Catch?
Is there one? Kind of.
The housing market is still brutal.
Even with these changes, prices in major cities are sky-high, and the market isn’t exactly easy to navigate. These reforms are going to help, but don’t expect them to be a magic bullet. Affordability is still going to be a challenge, especially with high interest rates sticking around for a while.
But there’s no denying these reforms are a step in the right direction. The 30-year amortization option alone could help more Millennials and Gen Zers finally see a light at the end of the tunnel. Stretching payments over a longer term brings those monthly payments down to something a little more reasonable, and that’s exactly what’s needed to make homeownership a reality for more people.
Why It Matters for You
If you’re a first-time buyer, this is your chance to jump in without being crushed by sky-high monthly payments. That 30-year option is a game-changer. And for those buying in pricier markets, the increase in the insured mortgage cap to $1.5 million means more flexibility to qualify for a loan with less than 20% down.
A Push for More Competition
One more thing to note—these reforms also include stress-test relief for insured mortgage holders at renewal. Starting now, borrowers with insured mortgages won’t need to requalify with a stress test when switching lenders at renewal. This levels the playing field and boosts competition among lenders. It’s a win for homeowners looking to get a better deal on their mortgage without the stress-test hassle.
Bottom Line
While these changes won’t solve the housing crisis overnight, they’re a significant step forward. If you’ve been looking for a chance to get into the market or help more clients take that leap, these new rules could make a big difference.
Are you a first-time buyer or looking to purchase a new development? Let’s talk. Book a call with me, and we’ll go over how these new mortgage rules can work for you: