The Canadian mortgage landscape is about to shift significantly. Finance Minister Chrystia Freeland announced major changes to federal mortgage policy, effective December 15, 2024. The price cap for insured mortgages will increase from $1 million to $1.5 million, and eligibility for 30-year mortgage amortizations will expand to all first-time homebuyers.
Increased Price Cap Opens Doors for First-Time Buyers
Raising the insured mortgage threshold allows more first-time homebuyers to enter the market, particularly in high-cost cities like Toronto and Vancouver. With the average home price in these areas exceeding $1 million, this change is expected to help those with less than a 20% down payment. Insured mortgages provide buyers with the chance to secure their dream home with a smaller initial investment, easing the path to homeownership in competitive markets.
30-Year Amortizations: Lower Monthly Payments for Buyers
The expanded eligibility for 30-year mortgage amortizations is another game-changer, providing first-time buyers with the option to stretch their mortgage payments over a longer period. This move is expected to lower monthly payments, offering relief to those navigating high interest rates. The extended amortization is particularly beneficial for condo buyers, especially investors who purchased new construction during record-low rates and are now facing much higher costs.
Changes Expected to Boost Fall Market Activity
These adjustments come at a critical time for the Toronto real estate market. With the fall season already shaping up to be busy, the new mortgage policies are likely to encourage more buyers to enter the market. The government’s hints at further changes in the coming weeks suggest even more support for first-time buyers could be on the horizon.
Stay Informed on Upcoming Mortgage Changes
As your trusted East Toronto real estate team, we’ll keep you updated on any new developments that impact your buying power. If you’re considering entering the market, these policy changes could be the opportunity you’ve been waiting for.
