Canada's Mortgage Rule Changes for First-Time Buyers

On the first day of the fall session of Parliament, the Liberal government announced important changes to mortgage rules aimed at first-time home buyers in Canada. Beginning December 15, all first-time buyers will now be eligible for a 30-year mortgage, expanding the amortization period and making homeownership more accessible for young Canadians. The government is also adjusting the cap for insured mortgages, raising it from $1 million to $1.5 million, thereby enabling more purchases with down payments below 20%. Personal finance experts, like Robina Ahmed, highlight that these changes could help alleviate monthly financial pressures, allowing first-time home buyers to stretch payments over a longer period. However, concerns persist regarding the potential long-term impact on housing prices, especially in hot markets like Vancouver and Toronto, where the demand continues to rise amidst limited supply. The government’s approach has been criticized, as the underlying issue of home scarcity remains, risking properties becoming even less affordable in the future. Experts anticipate a modest uptick in home prices due to increased purchasing power while noting the importance of ongoing monitoring of interest rates by the Bank of Canada. Lower interest rates in the future could assist buyers, yet paired with higher property prices, the situation remains complex and challenging for prospective homeowners.