The federal government has the most ambitious housing plan in Canadian history-including building 4 million new homes-to make housing more affordable for Canadians. This plan will build a Canada that is fairer for every generation of Canadians, where they can get ahead, where their hard work pays off, and where they can buy a home.
As announced on September 16, 2024, the federal government is expanding eligibility for 30 year amortizations for insured mortgages to all first-time homebuyers and all purchasers of new builds, and increasing the $1 million price cap for insured mortgages to $1.5 million, effective December 15, 2024. Today, the government is releasing parameters for lenders and insurers to begin offering mortgages under these reforms starting this December.
Parameters
Expanding eligibility for 30 year mortgage amortizations for all first-time homebuyers and all buyers of new builds
- This measure will apply to borrowers requiring high loan to value mortgage insurance in Canada and must satisfy the following requirements:
- The total loan to value is 80 per cent or more; and,
- The borrower is either: (i) a first-time homebuyer; or (ii) purchasing a newly constructed home.
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As the government announced on June 11, 2024, to be considered a first-time homebuyer, a borrower must meet one of the following criteria:
- The borrower has never purchased a home before;
- In the last 4 years, the borrower has not occupied a home as a principal place of residence that either they themselves or their current spouse or common-law partner owned; or,
- The borrower recently experienced the breakdown of a marriage or common-law partnership. On this point, the regulations will follow the approach that the Canada Revenue Agency has taken with respect to the Home Buyers' Plan.
- As the government announced on June 11, 2024, to be considered a newly constructed home, the new home must not have been previously occupied for residential purposes. This requirement is not intended to exclude newly constructed condominiums where there has been an interim occupancy period.
Increasing the $1 million price cap for insured mortgages to $1.5 million
- This measure would apply to all borrowers requiring high loan to value mortgage insurance in Canada and must satisfy the following requirements:
- The total loan to value is 80 per cent or more;
- The value of the eligible residential property against which the loan is secured must be less than $1.5 million; and,
- The downpayment requirements for the loan are as follows:
- 5 per cent on the portion of a purchase price up to $500,000.
- 10 per cent on the portion of a purchase price between $500,000 and $1.5 million.
Other Parameters
- Effective date: These measures will be available for mortgage insurance applications that lenders submit to mortgage insurers on or after December 15, 2024.
- These measures will only apply to high loan to value mortgages on properties occupied by the borrower or a close relative.
- All other eligibility criteria for government-guaranteed mortgage insurance will continue to apply.
