Federal Government Mortgage Reform Announcement | September 2024
The Toronto Regional Real Estate Board (TRREB) welcomes the changes to mortgage rules announced by Deputy Prime Minister and Minister of Finance Chrystia Freeland. TRREB strongly supports the extension of 30-year insured mortgage amortizations to all first-time home buyers which was limited to first time purchasers of new-builds, and increasing the price cap for insured mortgages that applies to those with a downpayment of less than 20 per cent. These measures will ensure that mortgages are more affordable and attainable for Canadians, especially first-time homebuyers.
The latest changes include a suite of reforms to mortgage rules that TRREB has advocated for the government to implement to help put homeownership within reach. The changes include:
Expanding eligibility for 30-year amortizations to all first-time homebuyers and all buyers of new builds effective December 15, 2024. This will help to extend the time period to pay out a mortgage, lowering monthly payments and making housing more affordable. TRREB continues to advocate for the 30-year amortization period to be extended to the resale market and for all buyers, not just first time buyers.
Increasing the $1 million price cap for insured mortgages to $1.5 million. This reflects the housing market today more accurately, especially in large urban centres, and assists homebuyers in protecting their equity. This will allow more Canadians to qualify for a mortgage and own a home.
These measures will help reduce the monthly cost of mortgage payments and make homeownership a reality for more people across the country. By enabling more Canadians to purchase newly constructed residences, including condominiums, these reforms will also stimulate new housing construction and help address the ongoing housing shortage in our communities.
TRREB welcomes the government’s decision to increase the insured mortgage price cap from $1 million to $1.5 million. Noting current market realities, this change will allow more people to qualify for an insured mortgage and provide crucial support for homebuyers in high-cost areas like the Greater Toronto Area.
TRREB supports the government’s decision, as announced in the 2024 budget, to allow insured mortgage holders to switch lenders at renewal without undergoing a new mortgage stress test. This will enable Canadians to find lenders and mortgage terms that are best suited for their needs, while enhancing competition in the mortgage market. TRREB reiterates our call for this renewal measure to be extended to uninsured mortgages, typically those where the homeowner made a larger downpayment. Homeowners with these less risky mortgages should have the same access to competition among lenders when renewing their mortgages.
“TRREB Members continue to support first-time buyers with the purchase of their home. The latest changes to mortgage rules are a step in the right direction and provides affordability and flexibility for homebuyers. We look forward to our continued collaboration with the Canadian Real Estate Association (CREA) and the federal government as we work together to achieve our shared goal of ensuring more Ontarians can access housing and financing options that meet their needs,” said TRREB President Jennifer Pearce.
“TRREB supports the latest changes to mortgage rules announced by Minister Freeland to ensure homeownership is within reach. The changes announced for first time buyers and those with insured mortgages will assist TRREB Members in helping Ontarians achieve homeownership. We have long advocated for these measures, particularly for homeowners to be able to switch lenders at mortgage renewal without a stress test. Increased competition among lenders is good for homeowners and homeownership, so we reiterate our call for this measure to be extended to mortgage renewals for those who do not require mortgage insurance,” said TRREB CEO John DiMichele.
As reported from the Toronto Regional Real Estate Board Press Release on September 17, 2024
