Feds also expand access to 30-year amortizations
The federal government is raising the cap on insured mortgages to $1.5 million and expanding access to extended mortgage amortization periods, a bid to tackle a housing affordability crisis that’s put home ownership out of reach of scores of Canadians.
Finance minister Chrystia Freeland said on Monday that the government was increasing the limit on insured mortgages from its previous level of $1 million and allowing home buyers to take out a 30-year loan if they’re buying for the first time or purchasing a newly built house.
The government had previously indicated that a 30-year amortization would only be available to first-time buyers who were purchasing a newly built home.
Freeland’s move to hike the insured cap addresses a longstanding mortgage industry grievance – namely, that the previous limit was freezing some buyers out of being able to purchase a home.
It means insurance, which is required for home purchases with a down payment of less than 20%, is now available to Canadians buying a property for up to $1.5 million.
That could prove significant in markets like Toronto and Vancouver, where average prices sit well over the $1 million mark – although eye watering price appreciation remains a major hurdle for many prospective buyers.
Freeland said the measures would “put the dream of home ownership in reach for more young Canadians,” and first-time buyers would be “in a stronger position” after the adjustments, also highlighting the prospect of an uptick in home building as a result.
Both changes are scheduled to come into effect on December 15.
Published by CMP