Chrystia Freeland said the changes, which will take effect in December, would better reflect the housing market.
The price cap for insured mortgages will be increased for the first time since 2012, from $1 million to $1.5 million, to allow more people to qualify for a mortgage with a down payment of less than 20%.
The federal government will also expand eligibility for the 30-year mortgage amortization to include first-time home buyers of all types of homes, including newly constructed homes.
Ms. Freeland explained at a press conference on Monday that “these are measures aimed at creating equity between generations and allowing young Canadians to have this Canadian dream and buy their first home.”
The Association of Construction and Housing Professionals of Quebec (APCHQ) welcomes this news and calls for more to be done. “For us, one measure is good, a bunch of measures is even better,” summarizes the group’s director of economic services, David Goulet.
Among other things, he hopes for a relaxation of the mortgage stress test, an increase in the GST refund on new properties and the transformation of the CELIAPP and the RAP into intergenerational plans. These measures are important, according to him, because “despite the successive reductions in the key rate, it remains high.”
Law Minister Arif Virani is also releasing plans on Monday for a tenants’ bill of rights and a property buyers’ charter, both promised by the government five months ago.
Minister Virani says the government intends to work with provinces to prevent practices like renovictions, where landlords evict tenants and do minimal renovations before re-renting at higher rents.
When this idea was raised by Prime Minister Justin Trudeau last March, the Quebec Minister responsible for Canadian Relations, Jean-François Roberge, stated that “there was no question of tolerating this new invasion of Quebec’s areas of jurisdiction.”
The federal government is announcing the measures Monday after a year of criticism over high housing costs across the country. The Liberals have been in freefall in polls for months, including among young adults, who say not being able to afford a home is one of their top concerns.
Eligibility for the 30-year depreciation was changed on August 1 to include first-time home buyers purchasing a newly constructed home, including a condominium.
TO SEE | Towards a drop in the key rate? Should we fix our mortgage rate or not?
– What are the new mortgage rule changes announced by the Canadian government for first-time home buyers?
Table of Contents
Canadian Government Announces Changes to Mortgage Rules to Help First-Time Home Buyers
In a bid to make homeownership more accessible to young Canadians, the federal government has announced significant changes to mortgage rules, effective December this year. The changes, unveiled by Deputy Prime Minister Chrystia Freeland, aim to create equity between generations and allow first-time home buyers to achieve the “Canadian dream” of owning their own home.
Increased Price Cap for Insured Mortgages
One of the key changes is the increase in the price cap for insured mortgages from $1 million to $1.5 million. This means that more people will be eligible to qualify for a mortgage with a down payment of less than 20%. The previous price cap had not been increased since 2012, and this move is expected to benefit many first-time home buyers who struggle to save for a down payment.
Expanded Eligibility for 30-Year Mortgage Amortization
The government will also expand eligibility for the 30-year mortgage amortization to include first-time home buyers of all types of homes, including newly constructed homes. This will give more young Canadians the opportunity to own their home, even if they don’t have a large down payment.
Measures to Create Equity Between Generations
At a press conference, Ms. Freeland explained that these measures are aimed at creating equity between generations and allowing young Canadians to own their first home. The changes are designed to address the growing concerns about housing affordability and the declining rates of homeownership among young Canadians.
Industry Reaction and Calls for Further Action
The Association of Construction and Housing Professionals of Quebec (APCHQ) has welcomed the news, but is calling for more measures to be taken. David Goulet, director of economic services for the APCHQ, hopes for a relaxation of the mortgage stress test, an increase in the GST refund on new properties, and the transformation of the CELIAPP and the RAP into intergenerational plans. According to Goulet, “despite the successive reductions in the key rate, it remains high.”
Tenants’ Bill of Rights and Property Buyers’ Charter
In addition to the changes to mortgage rules, Law Minister Arif Virani has also announced plans for a tenants’ bill of rights and a property buyers’ charter. The government aims to work with provinces to prevent practices like renovictions, where landlords evict tenants and do minimal renovations before re-renting at higher rents.
Preventing Renovictions and Protecting Tenants
Minister Virani stated that the government intends to prevent these unfair practices and protect tenants’ rights. The move is part of a broader effort to address the growing concerns about housing affordability and the need for greater protections for renters.
Conclusion
The changes to mortgage rules and the introduction of a tenants’ bill of rights and property buyers’ charter are significant steps towards making homeownership more accessible and affordable for young Canadians. While industry experts are calling for further action, these measures are a welcome step in the right direction. With the housing market continuing to evolve, it is essential to stay informed about the latest changes and developments that can impact your ability to own a home.
Keyword-rich subheadings:
Increased Price Cap for Insured Mortgages
Expanded Eligibility for 30-Year Mortgage Amortization
Measures to Create Equity Between Generations
Industry Reaction and Calls for Further Action
Tenants’ Bill of Rights and Property Buyers’ Charter
Preventing Renovictions and Protecting Tenants
Meta description: The Canadian government has announced changes to mortgage rules to help first-time home buyers, including an increase in the price cap for insured mortgages and expanded eligibility for 30-year mortgage amortization. Learn more about the latest developments in the housing market.
What are the new mortgage rule changes announced by the Canadian government for first-time home buyers?
Canadian Government Announces Changes to Mortgage Rules to Help First-Time Home Buyers
In a bid to make homeownership more accessible to young Canadians, the federal government has announced significant changes to mortgage rules, effective December this year. The changes, unveiled by Deputy Prime Minister Chrystia Freeland, aim to create equity between generations and allow first-time home buyers to achieve the “Canadian dream” of owning their own home.
Increased Price Cap for Insured Mortgages
One of the key changes is the increase in the price cap for insured mortgages from $1 million to $1.5 million, allowing more people to qualify for a mortgage with a down payment of less than 20%. This change, which takes effect in December, marks the first increase since 2012 and is expected to benefit many first-time home buyers who struggle to save for a 20% down payment.
Expanded Eligibility for 30-Year Mortgage Amortization
In addition to the price cap increase, the federal government is also expanding eligibility for the 30-year mortgage amortization to include first-time home buyers of all types of homes, including newly constructed homes. This change is a significant departure from the previous rule, which limited eligibility to first-time buyers of existing homes. The expansion is expected to make homeownership more accessible to a wider range of Canadians.
Reaction from Industry Experts
The Association of Construction and Housing Professionals of Quebec (APCHQ) has welcomed the news, but is calling for more action to address the affordability crisis. “For us, one measure is good, a bunch of measures is even better,” said David Goulet, the group’s director of economic services. Goulet hopes to see further measures, including a relaxation of the mortgage stress test, an increase in the GST refund on new properties, and the transformation of the CELIAPP and the RAP into intergenerational plans.
Tenants’ Bill of Rights and Property Buyers’ Charter
In addition to the mortgage rule changes, Law Minister Arif Virani is also releasing plans for a tenants’ bill of rights and a property buyers’ charter, both of which were promised by the government five months ago. The tenants’ bill of rights aims to prevent practices like renovictions, where landlords evict tenants and do minimal renovations before re-renting at higher rents. The property buyers’ charter, on the other hand, aims to provide more protections for homebuyers.
Context: Housing Affordability Crisis
The federal government’s announcement comes after a year of criticism over high housing costs across the country. The Liberals have been facing significant pressure to address the issue, particularly among young adults, who say that not being able to afford a home is one of their top concerns. The government’s decision to act on mortgage rules is seen as a step in the right direction, but many experts argue that more needs to be done to address the root causes of the affordability crisis.
What This Means for First-Time Home Buyers
The changes to mortgage rules announced by the Canadian government are expected to benefit many first-time home buyers who struggle to save for a down payment. The increased price cap for insured mortgages and expanded eligibility for the 30-year mortgage amortization are both aimed at making homeownership more accessible to young Canadians. However, with the housing market still experiencing high prices and low inventory, it remains to be seen whether these changes will be enough to make a significant impact on the affordability crisis.
Keywords: mortgage rules, first-time home buyers, Canadian government, housing affordability crisis, Chrystia Freeland, Arif Virani, Association of Construction and Housing Professionals of Quebec (APCHQ).
