We share with you here the press release from the Government of Ontario regarding the new guidance on 30 year mortgages for first-time home buyers. You can read the full press release at this ‘LINK’.
News release
July 29, 2024 – Toronto, Ontario – Department of Finance Canada
Canadians work hard to be able to afford a home. However, the high cost of mortgage payments are a barrier on the path to homeownership, especially for Millennials and Gen Z. To break down these barriers and help more young Canadians buy a first home, Budget 2024 announced the federal government would allow up to 30 year amortizations for insured mortgages for first-time homebuyers purchasing new builds.
Today, the Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, announced that as of August 1, 2024, lenders will be able to begin to offer 30 year amortizations for insured mortgages for first-time homebuyers purchasing new builds, providing younger Canadians with more affordable monthly mortgage payment options. Extending amortizations by up to five years will allow for lower monthly payments—helping more young Canadians unlock the door to their first home, while also incentivizing the construction of more new homes.
This is part of the strengthened Canadian Mortgage Charter. The Mortgage Charter protects homeowners in mortgage difficulty by ensuring they have access to tailored mortgage relief, and takes action to restore generational fairness to the housing market for younger Canadians, such as intending for renters to improve their credit score with their on-time rent payments.
Building on the Tax-Free First Home Savings Account, which so far has helped more than 750,000 Canadians start saving for a down payment faster, first-time buyers of new builds will now be able to reduce their monthly payments by taking an additional five years to pay off their mortgage.
The federal government is helping every generation reach their full potential—including buying a home of their own—by building a Canada that is fair for every generation.
The Canadian Government has provided the following detailed information and guidelines as to what exactly borrowers must comply with in order to get 30 year mortgages for first-time home buyers:
Borrowers that satisfy the following requirements will be eligible for up to 30 year mortgage amortizations:
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First-Time Homebuyer:
At least one of the borrowers on an application must be a first-time homebuyer. To be considered a first-time homebuyer, a borrower must meet one of the following criteria:- The borrower has never purchased a home before;
- In the last 4 years, the borrower has not occupied a home as a principal place of residence that either they themselves or their current spouse or common-law partner owned; or,
- The borrower recently experienced the breakdown of a marriage or common-law partnership. On this point, the regulations will follow the approach that the Canada Revenue Agency has taken with respect to the Home Buyers’ Plan.
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Newly Constructed Home:
The property that the borrower is purchasing must be a newly constructed home. To be considered a newly constructed home, the new home must not have been previously occupied for residential purposes. This requirement is not intended to exclude newly constructed condominiums where there has been an interim occupancy period. -
Effective Date:
This measure will be available for mortgage insurance applications that lenders submit to mortgage insurers on or after August 1, 2024. The government expects lenders will begin offering 30 year mortgages to eligible first time buyers as soon as August 1. - This measure will only apply to high-ratio mortgages (mortgages where the loan amount exceeds 80 per cent of the home price) on owner-occupied properties.
- All other eligibility criteria for government-guaranteed mortgage insurance will remain in place.