Finance Minister Chrystia Freeland is making significant changes to Canada’s mortgage rules, allowing for more flexibility in the current housing market. One of the key adjustments is the reintroduction of 30-year amortization periods for insured mortgages. This is a shift from the current limit of 25 years and could lower monthly payments, providing some relief to first-time homebuyers who are struggling to afford rising home prices.
Another notable change is the increase in the maximum value for insured mortgages. Under the new policy, homes valued up to $1.25 million will now be eligible for insured mortgages, up from the previous limit of $1 million. This change reflects the reality of higher housing prices in cities like Toronto and Vancouver, where the average cost of homes has surpassed the $1 million mark, making it harder for buyers to qualify for insured loans under the previous limits.
These measures are part of the government’s broader effort to address the affordability crisis gripping the housing market. While they offer more borrowing flexibility, critics argue that they could fuel even higher home prices by increasing demand. However, Freeland’s office has emphasized that these policies are aimed at helping middle-class Canadians achieve homeownership in a challenging market.
The changes are expected to have a significant impact, particularly in urban centres where housing costs have skyrocketed in recent years. By making it easier for buyers to access insured mortgages and manage monthly payments, the government hopes to alleviate some of the financial strain, though it remains to be seen whether this will address the underlying issue of housing supply.
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