Changes are coming to Canadian mortgages later this year

The federal government is extending mortgage amortizations alongside other changes for homebuyers nationwide, with the adjustments anticipated to take effect later this year.

In a recent report from real estate watchdogs at Wahi, the impact of these changes was broken down into their basic components, to relay just what they mean for the average Canadian homeowner.

The primary draw of these announcements surrounds the eligibility expansion for 30-year mortgages across the country, which is a non-discriminating clause, indicating that regardless of buyer history or planned home design, anyone is eligible for the upcoming extensions. 

With this extension — a five-year bump front the original 25-year amortization period — Wahi’s report anticipates that as a result, borrowers can potentially shave hundreds of dollars off of their monthly payments.

However, as a byproduct of a leveled playing field for first-time borrowers and homeowners, Wahi’s data also indicates that some of the reductions in monthly mortgage payments will likely be offset by higher home prices — signaling a more competitive market down the road for anyone looking to buy. 

Additional findings in Wahi’s report surround the new announcement that Canadian homeowners will have access to insured mortgages for homes priced up to $1.5-million, providing further stability across the board, as the current mortgage cap of $1-million makes detached home purchases in regions like Vancouver or the Greater Toronto Area nearly impossible.

The report also implied that, as a result of these changes, would-be first-time homebuyers could skip the starter home process, such as  a more modest condo, and go straight to a single-family home.

These two major reforms — according to information provided by Wahi — are set to take effect on Dec. 15, 2024. 

For more information on these changes to the Canadian mortgage landscape, visit the Government of Canada’s official website.