Four New Federal Housing Policies

Monday Apr 15th, 2024


Well…it’s a start.


Our Federal Government has announced  4 new measures they believe will make it easier for home ownership in Canada:

1.   As of April 16, Canadians can now take up to $60,0000 out of a registered retirement savings plan (RRSP) to put towards the down payment of a ‘first home’.  This is an increase from the previous RRSP limit of $35,000. The Home Buyers Plan allows individuals to make this tax free, RRSP withdrawal, as long as it’s paid back, into the account, over the course of 15 years.


2.    As well, Ottawa is now giving, these first time buyers, 5 years before they have to start paying it back. Before now, they had to begin repaying within 2 years. The extension applies to anyone who makes or has made a withdrawal from the Home Buyers’ Plan between 2022 and 2025.


3.    Starting August 1, the Canadian government will allow 30-year amortization periods on insured mortgages (for first-time home buyers purchasing newly built homes directly from builders.

The Canadian Home Builders' Association has advocated for longer amortization periods, saying five more years would help with affordability and spur more construction. Under the current rules, if a down payment is less than 20% of the home price, the longest allowable amortization -- the length of time a homeowner has to repay their mortgage – is 25 years.

Personally, while it’s a step in the right direction, and the increase to 30 years will definitely help the monthly mortgage payments for certain home buyers, I want to see this policy expanded to everyone purchasing a home regardless of whether it’s a new build or a pre-existing home.   

In a city like Toronto, new-build homes are incredibly expensive. And there’s not a lot of ‘vacant’ land to build affordable new construction. To me, it’s worrisome that the push to a 30-year amortization isn’t really going to help first time, young buyers in an urban centre like ours.  


4.    In the next few months CMHC will decide whether it will increase the maximum purchase price for insured-mortgages. Currently, with less than 20% down, Canadian Mortgage and Housing Corporation offers mortgages but only up to a purchase price of $1 million. With Toronto prices so much higher, this is such a roadblock to home ownership. Realistically, we never want to endure a sub-prime mortgage issue like we did in 2009, however buyers need as much help as possible to become home owners. As well, what about owners whose mortgages are coming up for renewal or refinancing?  They need to be able to stay in and keep their homes.


It's a start, but it’s coming up short and not nearly enough.

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