Deputy Prime Minister and Finance Minister Chrystia Freeland announced a number of housing affordability measures Thursday that she said will help buyers get their first homes and help current homeowners afford the homes they have. “I really hope and believe the specific measures we announced today are going to provide a lot of comfort and a lot of hope to young Canadians.”
Freeland announced that effective April 16, the amount first-time home buyers can withdraw from their RRSPs to make a down payment on their first home will rise from a maximum of $35,000 to $60,000.
People who make such withdrawals between Jan. 1, 2022, and Dec. 31, 2025, are also getting more time to begin repayment — up to five years in total rather than two.
Freeland also said the government will change mortgage rules to allow people struggling to pay their monthly home debts to permanently extend their repayment term to 35 years. As of August 1st, first-time homebuyers who purchase newly constructed homes will also get to borrow mortgages for 30-year terms, instead of 25 years.
She also said that depending on a homeowner’s circumstances, the amortization period can be made permanent, even for people with insured mortgages, and making that change will not come with any extra fees or penalties.
The Canadian Home Builders’ Association has advocated for longer amortization periods, saying five more years would help with affordability and spur more construction.
This is the first time in more than a decade that Ottawa has eased its mortgage rules, which have increasingly become tougher to protect banks from mortgage defaults and ensure homeowners can handle their debt loads.
Some other changes that were announced in the fall under the Canadian Mortgage Charter required that the banks reach out to homeowners four to six months in advance of their mortgage renewal date to inform them of affordability options.
Freeland said that now lenders will have to contact borrowers up to 24 months in advance of a homeowner’s mortgage renewal to discuss options.
Here are the top 5 trending stories of the week:
- No Regrets: Vast Majority Of Canadian Homeowners Don’t Have Buyer’s Remorse | “Canadian homeowners don’t have buyer’s remorse – at least, not when it comes to the roof over their heads, they don’t. New stats from a Wahi survey of Angus Reid Forum members reveal that the country’s homeowners who purchased a home in recent years have no regrets, even amid the rising cost of living and higher mortgage rates.
- Canada To Get First Nation-Wide Renters’ Bill Of Rights: Feds | “Real estate experts say many potential homebuyers are waiting for rate cuts before entering the real estate market following the Bank of Canada’s latest decision to hold rates, but demand remains high for some properties. Victor Tran, mortgage and real estate expert at Rates.ca, said in a statement to BNNBloomberg.ca Wednesday that the housing market “continues to be in a holding pattern” characterized by tight supply and “stiff competition for desirable properties.”
- TRREB calls for bold municipal action to tackle housing affordability | The dream of homeownership is slowly slipping further out of reach for countless Canadians. While all levels of government play a role in addressing this housing crisis, much of the responsibility lies with municipalities to expedite the construction of much-needed housing supply with the financial support of the provincial and federal governments.
- Low credit score? Here’s how Canada’s new Renters’ Bill of Rights could help improve it | “For many, one of the most significant roadblocks to owning a home could be their credit score. Your credit score can directly impact whether you qualify for a mortgage and the amount of mortgage you can secure. It could also affect the size of a down payment a lender will need, which determines whether you have to pay for private mortgage insurance (PMI) and, if so, how much, explains credit bureau company Equifax.”
- Toronto is seeing a huge uptick in ultra-rich people buying luxury homes | “It’s been six years since Toronto said goodbye to the iconic Honest Ed’s retail complex at Bathurst and Bloor, torn down to make way for the new Mirvish Village community. Years after the landmark discount retailer vacated the site, the former location of Honest Ed’s is coming alive with new retailers and residents.”
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