Canadians work hard to be able to afford a home. However, the high cost of mortgage payments is a barrier to homeownership, especially for Millennials and Gen Z. The prospect of owning a home in Canada needs to be as real for young people today as it was for previous generations. That is why the federal government is taking significant action to make the housing market fairer for every generation.
Today, the Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, highlighted that the federal government's bold mortgage reforms are coming into force today. By making downpayments and monthly mortgage payments more affordable, the government is unlocking the dream of homeownership for more Canadians.
To lower the cost of downpayments, effective today, December 15, 2024, the federal government has increased the $1 million price cap for insured mortgages to $1.5 million. For example, a minimum downpayment on a $1.4 million home would now be up to $165,000 lower. This is helping more Canadians, especially younger generations, get those first keys of their own.
To lower monthly mortgage payments by hundreds of dollars, the federal government's reform to make 30-year amortizations available to all first-time home buyers and to all buyers of new builds will also come into force today. This will reduce the cost of monthly mortgage payments so that more Canadians can afford a mortgage as they start their career and work their way up the salary ladder.
These mortgage reforms build on the strengthened Canadian Mortgage Charter¸ announced in Budget 2024, which allows insured mortgage holders to switch lenders at renewal without being subject to another mortgage stress test (also known as the minimum qualifying rate). Unlocking homeownership for every generation is a top government priority. That is why the federal government has the most ambitious housing plan in Canadian history-a plan to build 4 million new homes, while also protecting renters and helping them save for a downpayment. Further action to make housing more affordable for Canadians will be announced tomorrow in the 2024 Fall Economic Statement.
