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“It is going to put the dream of home ownership in reach for more young Canadians,” Freeland told reporters Monday, announcing changes she said will come into force in December.
How much do Canadians need for a down payment?
The price cap for insured mortgages will be boosted for the first time since 2012, moving to $1.5 million from $1 million, to allow more people to qualify for a mortgage with less than a 20% down payment.
“That is going to have a real impact for thousands, even millions of Canadians,” Freeland said.
What can you buy with a 30-year mortgage?
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home. On Aug. 1 eligibility for the 30-year amortization was changed to include first-time buyers purchasing a newly-built home. Freeland said this change better reflects the housing market while “giving first-time homebuyers a leg-up.”
She pushed back on suggestions that the measures will only further inflate housing prices. She said boosting the price cap for insured mortgages reflects how Canada’s gross domestic product has grown over years. “It needs to keep up with the increase in the size of the Canadian economy,” Freeland said. “That’s just a recognition of economic reality.”
Bill of rights for Canadian home buyers
Justice Minister Arif Virani is also releasing drafts for a bill of rights for renters as well as one for homebuyers, both of which the government promised in its federal budget five months ago. Virani says the government intends to work with provinces to prevent practices like renovictions, where landowners evict tenants and make minimal renovations and then seek higher rents.
Ottawa also wants to boost transparency by making sales price history available on title searches, and protect potential buyers from blind-bidding.
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The Canadian Press
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