On September 16, 2024, the Canadian government issued a significant remark that may have an impact on the housing market. New mortgage guidelines aim to make it easier for Canadians, particularly Millennials and Generation Z, to buy a home. These measures, hailed as the most significant in decades, will benefit first-time homebuyers while also spurring new housing construction.
At Sandhu Sran Mortgages, we understand how tough it may be to buy a home with rising costs. Let’s look at these changes, how they can help you, and how we can guide you through the process of acquiring your dream house.
Key Changes in the 2024 Mortgage Reforms
- 30-Year Amortization for New Homes
One of the most notable changes is that first-time homebuyers can now obtain 30-year mortgages on newly constructed properties. This includes condos. This law, which takes effect on August 1, 2024, allows first-time buyers to spread their payments over a longer period, lowering monthly rates.
Starting December 15, 2024, this 30-year option will be available to all buyers of newly built homes. The goal is to help more Canadians manage their monthly payments while simultaneously stimulating the construction of new homes to meet demand.
- Increase of the Insured Mortgage Cap to $1.5 Million
Another significant change is the increase in the insured mortgage cap from $1 million to $1.5 million on December 15, 2024. This is the first increase since 2012 and demonstrates how much property values have climbed, particularly in Toronto and Vancouver.
This higher cap will enable many more Canadians to qualify for mortgages, even on lower down payments. It’s particularly helpful to consumers in high-cost locations who are struggling to make their mortgage obligations.
- Switching Lenders Without the Need for Stress Tests
The government is also making it easier for homeowners to transfer mortgage providers without having to retake the stress test. This reform enables clients to get better bargains when renewing their mortgages without having to worry about rigorous new requirements.
Addressing the Housing Crisis: Building 4 Million Homes
The new mortgage criteria are part of a larger strategy to address Canada’s housing crisis. The government intends to build more than 4 million new homes, the most ambitious housing program in Canadian history. This project attempts to enhance the supply of dwellings to meet demand, making it easier for Canadians to locate low-cost housing.
The government hopes to boost the attraction of new building by combining longer mortgage terms with higher lending caps. As a result, more properties become available on the market, and prices steadily fall.
Protecting the Rights of Homebuyers and Renters
In addition to making mortgages more affordable, the government protects the rights of homeowners and renters through the Renters’ Bill of Rights and the Home Buyers’ Bill of Rights. These new frameworks are intended to improve fairness and transparency in the housing market.
- Renters’ Bill of Rights: Protects renters from unfair activities such as renovictions (evictions for repairs that result in increased rentals). It also attempts to simplify rental agreements and increase price transparency.
- Home Buyers’ Bill of Rights: Focuses on making the process of buying a home more transparent. Its goal is to eliminate blind bidding, a common practice in real estate, and make it easier to get home price histories.
The government is working with provinces and territories to carry out these measures, with $5 billion from the Canada Housing Infrastructure Fund.
Helping First-Time Homebuyers Save: Tax-Free Accounts and RRSP Withdrawals
Saving for a down payment is one of the most difficult challenges for first-time homebuyers. To assist, the government developed two programs that make it easier for Canadians to save:
- Tax-Free First Home Savings Account (FHSA): This allows you to save up to $8,000 each year for your first home, with a lifetime cap of $40,000. Contributions and withdrawals are tax free. More than 750,000 Canadians have already begun to use this account to save for their home.
- Home Buyers’ Plan (HBP): The government has increased the maximum RRSP withdrawal limit from $35,000 to $60,000. These reforms, together with the construction of around 4 million new homes, will have a huge impact on the housing market.
A New Path to Affordable Homeownership
The 2024 mortgage reforms represent a huge step forward in making homeownership more affordable to Canadians, particularly younger generations who have suffered from high prices and mortgage rates. The government addresses the critical issues that have kept many people from owning houses through extending amortization periods, raising the insured mortgage ceiling, and removing some hurdles in stress tests for shifting lenders.
Deputy Prime Minister Chrystia Freeland stated, “We have taken bold action to help more Canadians afford a downpayment, including with the Tax-Free First Home Savings Account, through which more than 750,000 Canadians have already started saving. Building on our action to help you afford a downpayment, we are now making the boldest mortgages reforms in decades to unlock homeownership for younger Canadians. We are increasing the insured mortgage cap to reflect home prices in more expensive cities, allowing homebuyers more time to pay off their mortgage, and helping homeowners switch lenders to find the lowest interest rate at renewal.”
How Sandhu Sran Mortgages Can Help
Sandhu Sran Mortgages is here to help you understand these changes and take advantage of the new opportunities. Whether you are a first-time homeowner looking for a new home or need help obtaining a better mortgage offer, we are here to help you at every step of the process.
We work with number of lenders to find you the best rates, and we stay up to date on the latest government regulations to guarantee you always get the best advice. With over 4 million new houses planned and more reasonable mortgage options available, this is an excellent moment to take the next step toward homeownership.
👉 Contact Sandhu Sran Mortgages today to get started on your home-buying journey.
https://www.sandhusranmortgages.com/