Announced April 11, 2024, the Canadian government is making a huge change for First Time Home Buyers (FTHB). This change is only for newly built homes.
For a FTHB using less than 20% down payment, you needed to get an insured mortgage – which required 25 year amortization. Compared to conventional mortgages that allow up to 30 year amortization, this made it difficult to qualify for a mortgage. The shorter amortization increases the mortgage payment and income required to qualify.
Starting August 1, 2024, borrowers that are buying their first home, will be allowed to lower their payment by getting a longer amortization!
This is great news to allow younger people the ability to buy their first home.
Another major change that will be coming around the same time is an increase in the Home Buyer Plan (HBP). Currently, you are able to take out $35,000 per First Time Buyer on a purchase from their RRSP as an interest free loan. The new rules will allow this number to go up to $60,000!
That’s a massive increase and should make it much easier to get into a home.
Source: CTV News